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When Maximino died, Donata through her petition she was able to transfer in her as a sole owner the properties acquired by Maximino prior to their marriage. When Donata died her niece and nephew took over the properties as administrator, by this time one of the descendants also file a petition to be appointed as administrator but it was not successful because the properties are already under the name of Donata and her descendants was already assigned as administrators. The heirs of Maximino claimed that they were defrauded by Donate when she successfully transferred the properties under her name and allege that Donata was just a trustee under Art 1451 of NCC. Issue: Is Donata just a trustee? Ruling: No. The court finds that Donata did not use fraud when she transferred the properties in her name. Donata and some of Maximino’s siblings just live in the same street and from the wake Maximo it was only now that they made an action. The heirs of Maximino failed to prove by clear and convincing evidence that Donata managed, through fraud, to have the real properties, belonging to the intestate estate of Maximino, registered in her name. In the absence of fraud, no implied trust was established between Donata and the heirs of Maximino under Article 1456 of the New Civil Code. Donata was able to register the real properties in her name, not through fraud or mistake, but pursuant to an Order, dated 2 October 1952, issued by the CFI in Special Proceedings No. 928-R. The CFI Order, presumed to be fairly and regularly issued, declared Donata as the sole, absolute, and exclusive heir of Maximino; hence, making Donata the singular owner of the entire estate of Maximino, including the real properties, and not merely a co-owner with the other heirs of her deceased husband. There being no basis for the Complaint of the heirs of Maximino in Civil Case No. CEB-5794, the same should have been dismissed. LABANON vs LABANON Trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. Trusts are classified under the Civil Code as either express or implied. Such classification determines the prescriptive period for enforcing such trust. No particular form of words or conduct is necessary for the manifestation of intention to create a trust. It is possible to create a trust without using the word "trust" or "trustee". Conversely, the mere fact that these words are used does not necessarily indicate an intention to create a trust. The question in each case is whether the trustor manifested an intention to create the kind of relationship which to lawyers is known as trust. It is immaterial whether or not he knows that the relationship which he intends to create is called a trust, and whether or not he knows the precise characteristics of the relationship which is called a trust.
An express trust is created by the direct and positive acts of the parties, by some writing or deed or by words evidencing an intention to create a trust; the use of the word trust is not required or essential to its constitution, it being sufficient that a trust is clearly intended. Under Section 40 of the old Code of Civil Procedure, all actions for recovery of real property prescribed in 10 years, excepting only actions based on continuing or subsisting trusts that were considered by section 38 as imprescriptible. As held in the case of Diaz v. Gorricho, L-11229, March 29, 1958, however, the continuing or subsisting trusts contemplated in section 38 of the Code of Civil Procedure referred only to express unrepudiated trusts, and did not include constructive trusts (that are imposed by law) where no fiduciary relation exists and the trustee does not recognize the trust at all. that the prescriptive period for the enforcement of an express trust of ten (10) years starts upon the repudiation of the trust by the trustee Gomez v. Duyan Before this Court is a petition for review on certiorari assailing the Decision of the Court of Appeals in CA-G.R. CV No. 49163 ordering the reconveyance by the petitioners to the respondents of the property covered by Transfer Certificate of Title (TCT) No. 281115 and declaring said title cancelled, thereby  reversing the Decision of the Regional Trial Court (RTC) of Quezon City, Branch 80 which dismissed the complaint. The dispositive portion of the challenged Decision reads as follows: WHEREFORE, premises considered, the assailed decision of the Regional Trial Court of Quezon City, Branch 80 in Civil Case No. Q-91-8821 is hereby REVERSED and SET ASIDE. ACCORDINGLY, defendants-appellees are hereby ordered to RECONVEY in favor of plaintiffs-appellants the property  covered by TCT No. 281115, which title is hereby declared CANCELLED. With costs. The facts as culled from the records are as follows: The parties in this case are relatives residing at 96 General Avenue, Project 8, Quezon City which consists of four houses situated in an eight hundred-square meter (800 sq.m.) lot, covered by TCT No. 41717 issued by the Register of Deeds of Quezon City in the name of Eulogio Duyan (now deceased) married to Purisima Duyan, one of the respondents in this case. The property in dispute which constitutes one-half of the property previously covered by TCT No. 41717 is now covered by TCT No.  281115 issued in the name of petitioner spouses. Eulogio Duyan and Feliza Duyan are siblings. In his desire to help his sister, Eulogio allowed her to  construct a house on the disputed lot sometime in 1968. Petitioners acknowledged the fact that the disputed property was owned by Eulogio and that they were staying in the disputed property solely due to his benevolence. Accordingly, an instrument entitled Pagpapahayag was executed by the siblings on 5 May 1974. The instrument provides that in the event that the property will be registered in Feliza’s name, she will continue to acknowledge Eulogio as the owner and will never assert ownership over the same,  except in accordance with her brother’s wishes. The pertinent portions of the instrument read: Na napagkasunduan naming magcapatid na bouin ang documentong ito bilang katibayan ang lahat; .... 4. Na kaming magkapatid ay magtutulongan at magdadamayan maging sa hirap at ginhawa alang-alang sa ikabubuti ng aming mga mahal sa buhay;
5. Na ito ay mailagay sa pangalan man ng aming Ama o pangalan ko ay ito’y hindi ko pag aari kundi ari ito ng aking kuya, Eulogio V. Duyan, at6. Na ito ay aming igagalang maging saan man makarating ngayon at kailan man.
On 11 May 1974, a deed of sale covering a residential house situated on the disputed lot was executed by Eulogio and Regina Velasquez, a common-law wife of the former, in favor of petitioners for the sum of One Thousand Pesos (P1,000.00). Thereafter, petitioners allegedly asserted ownership not  only over the said house but over the whole lot covered by TCT No. 41717. This prompted Eulogio’s legal wife, Purisima, to file a complaint for recovery of possession and damages against petitioners with  the then Court of First Instance of Rizal, Branch IV-B, Quezon City. Deciding the case in favor of Purisima, the trial court ordered petitioners to surrender possession of the property to her. On appeal, the Court of Appeals dismissed the case after the parties entered into an  amicable settlement. On 25 January 1978, Eulogio and Purisima this time, as vendors, executed a Deed of Absolute Sale in favor of petitioners with respect to the disputed lot for the sum of Twenty Thousand Pesos  (P20,000.00). Purisima claims that the deed of sale was executed merely to give color of legality to petitioners’ stay in the disputed property so that she and her children will not drive them away after they (Purisima  and her children) manifested their opposition to Eulogio’s decision to let them stay therein. Petitioners claim otherwise, contending that the sale was freely agreed upon by the parties thereto; hence, it was  authentic and validly executed. Subsequent to the execution of the deed of sale or on 10 February  1978, another Pagpapahayag was executed between Eulogio and Feliza, where the latter  acknowledged that the lot subject of the deed of sale will eventually be transferred to respondents  herein who are her nephews and nieces and the children of Eulogio. The pertinent portions of the second Pagpapahayag read: Na pagkatapos ng lahat ng hidwaan sa Husgado ay aming isasagawa agad and conwaring pagbibili muli ng nasabing xxx aming binili sa aking capatid na si Gg. Eulogio V. Duyan. At pag mangyari ang nasabing hatian ng lote, ay aming ilalagay agad sa pangalan ng aming mga pamangkin na sina Salome V. Duyan, Divina V. Duyan, Cresencia V. Duyan, Reulgina V. Duyan, Domincia, Rodrigo at  Avencio C. Duyan. Notwithstanding the second Pagpapahayag, petitioners caused the registration of the deed of sale dated 25 January 1978 with the Register of Deeds of Quezon City. As a consequence, TCT No. 281115  covering the disputed lot was issued on 22 September 1981 in the name of petitioners. On 20 May 1991, respondents filed a suit for reconveyance of real property and cancellation of TCT No. 281115 with damages against petitioners before Branch 80 of the Quezon City RTC. On 5 September 1994, the trial court rendered a decision, dismissing the complaint and ordering respondents to pay jointly and severally defendants therein, now petitioners, the amount of Ten  Thousand Pesos (P10,000,00) as reasonable attorney’s fees and to pay the costs of the suit. In dismissing the case, the trial court held that: …[the] TCT No. 281115 (Exh. 4) was validly issued pursuant to the Absolute Deed of Sale dated January 25, 1978 (Exh. 3) duly registered at the Office of the Registry of Deeds of Quezon City. The same became indefeasible and conclusive upon the expiration of one year period from its entry as it was not attacked  directly by anyone due to fraud.
the intent of the siblings to create a trust was manifest with Eulogio as the trustor. Duyan. deed or will.  Duyan. 41717. A person who establishes a trust is called the trustor. Feliza undertook in the subsequent Pagpapahayag to convey the property subject of the fictitious deed of sale to her own nephews and nieces who are the children of her brother Eulogio. the trust created was not merely implied as held by the Court of Appeals but belongs to the express kind. or words evincing  an intention to create a trust. B). To reiterate. Duyan. the same does not bar her totally from becoming as owner because of the exception provided therein that she can still own the lot or part thereof in accordance with the wishes of the deceased which was clearly manifested when the Absolute Deed of Sale of the half of the lot covered by TCT No. the trial court nevertheless held that: In the document entitled “Pagpapahayag” (Exh. The contention is without merit. Petitioners in their petition for review contend that the Court of Appeals “acted with grave abuse  of discretion” when it reversed the RTC decision and that the error. by some writing. the case was elevated to this Court by way of a petition for review. Although it recognized the instruments creating the trust. While citing the provisions of the Pagpapahayag dated 5 May 1974 and concluding therefrom that Feliza was not actually prohibited from claiming ownership over the property. As found by the appellate court. 1440. Domincia. Divina V. Reulgina V. the Court of Appeals reversed the decision and held that an implied trust arose in favor of respondents over the disputed property by virtue of the Pagpapahayagdated 10 February 1978. Cresencia V. the trial court completely disregarded and missed the import of the other Pagpapahayag dated 10 February 1978. the trial court failed to consider the law on trusts despite the existence of uncontroverted evidence establishing the creation of a trust as it anchored its decision solely on the indefeasibility of title aspect. It held  that the action for reconveyance of property was properly filed by respondents against petitioners. “Express trusts are those which the direct and positive acts of the parties create. even in the event that the same will be transferred in her name. However. In express terms. Duyan”. This is based on the provision of the law on trusts which states that: Art. It must be noted that this Pagpapahayag was entered into by Eulogio and Feliza after the supposed sale of the property on 25 January 1978. Based on the provisions of the Civil Code and jurisprudence. The Court of Appeals did not err in ordering the reconveyance of the property in dispute. Based on the clear provisions of this document. Feliza as the trustee and Eulogio’s children as the beneficiaries   or the cestui qui trust of the res which was the disputed property. They claim that the Court of Appeals erred when it ordered the reconveyance by petitioners to respondents of the property covered by TCT No. although the defendant Felisa Gomez stipulated therein that she will not claim ownership over the lot covered by TCT No. Rodrigo at Avencio C. and the person for whose  benefit the trust has been created is referred to as the beneficiary. 281115 and declared the cancellation of  said title . one in whom confidence is reposed as regards property for the benefit of another person is known as the trustee. if not corrected. Petitioners’ motion for reconsideration having been denied by the appellate court in  a Resolution promulgated on 28 June 2000.”   . 41717 was executed between the deceased and his spouse Purisima Duyan  (plaintiff) and the defendants. Duyan. will cause them  great injustice. ay aming ilalagay agad sa pangalan ng aming mga pamangkin na sina Salome V. Feliza stated “…At pag mangyari ang nasabing hatian ng lote.On appeal.
They further . Feliza did not even raise any objection as to the due execution and authenticity of the “Pagpapahayag” dated 10 February 1978. authenticity and due execution of  the 10 February 1978 Pagpapahayag as they merely objected to the purpose of its presentation. they are the rightful owners thereof. it being sufficient that a trust is clearly  intended. for it may even be created orally. It was clearly intended therein by Eulogio and Feliza that the property subject of the sale will subsequently be placed by the latter in the name of respondents.  the latter not being the owners of the property in question. Invoking the 25 January 1978 deed of sale despite Feliza’s admission adverted to above that such sale was fictitious. Particularly. and the TCT being in their name. petitioners are estopped from claiming or asserting ownership over the subject property based on the 25 January 1978 deed of sale. Moreover. it is not necessary that the document expressly state and provide for the express trust. the establishment of an express trust cannot be discounted. “No particular words are required for the creation of an express trust. Petitioners argue that the action for reconveyance filed by respondents against them is not proper.” Considering this pronouncement of the Supreme Court and the betrayal by petitioners of the provisions of the Pagpapahayag creating the trust in this case. this Court held that “…under the law on Trusts. 1444. the latter having relied upon her representation.” Thus.” That admission cannot now be denied by Feliza as against Eulogio and his successors-in-interest. the GOMEZES as signatories  thereto. It is worthy of note that petitioners never denied the existence.” In a decision penned by Justice Paras. it is worthy to note that an objection as to the purpose of its presentation is not tantamount to an objection as to the authenticity and due execution of the document. but actually circumvented them. This is evident by the use of the phrase “conwaring pagbibili” which means “simulated or fictitious sale. “Through estoppel an admission or representation is rendered conclusive upon the person making  it. “A trust … is sacred and inviolable. and cannot be denied or disproved as against the person relying thereon. the provisions of the Pagpapahayag dated 10 February 1978 left no room for doubt. Under the Civil Code. petitioners not only failed to comply with the provisions of thePagpapahayag. it had the force of law between them. They claim that the best proof of ownership of a piece of land is the  certificate of title. The courts have therefore shielded fiduciary relations against  every manner of chicanery or detestable design cloaked by legal technicalities.” ThePagpapahayag dated 10 February 1978 having been freely entered into by Eulogio and Feliza. 21885. Even if the word “trust” was not expressly used by the signatories to the 10 February 1978 Pagpapahayag and the document did not expressly state that a trust was being established by reason thereof. no particular words are required for its creation (Art. By these actions. the Court of Appeals rightly ordered the reconveyance of the disputed property to respondents and the cancellation of TCT No. In view of the absence of such objection. Under the Civil Code. petitioners assert that they are the owners of the subject property.In this case. Civil  Code). In relation thereto. thus creating a trust relationship over the property in dispute. As held by the appellate court: Neither refutation nor denial of the existence of such document exist in the records of the case at bar. Feliza’s admission in the said Pagpapahayag of the falsity of the sale is deemed conclusive upon her and her co-petitioner Eugenio Gomez. Petitioners’ subsequent act of registering the disputed property in their own names and resisting the action for reconveyance later filed by respondents was clearly a betrayal of the provisions of the express trust created by the 10 February 1978 Pagpapahayag. petitioners admitted in the Pagpapahayag itself that the 25 January 1978 sale was  fictitious. It was therefore incumbent upon Feliza as trustee to comply with the provisions of the instrument and have the subject property registered in the names of her nephews and nieces. are deemed bound by the stipulations therein.
As this Court held in the case of Escobar vs. petitioners contend that the conflict between the decision of the appellate court and that of  the trial court provides this Court with a ground to review the decisions of both courts. Lastly.argue that based on the case of Dela Peña vs. owned by the late Jacobo Ringor. The controversy involves lands in San Fabian. Costs against petitioners. seeks to transfer or reconvey the land from  the registered owner to the rightful owner. 2001. “The  Torrens system was never calculated to foment betrayal in the performance of a trust. By his first wife. the petition is DENIED due course and the Decision of the Court of Appeals is AFFIRMED. Court of Appeals among others. This declaration. 48581 and its Resolution. SO ORDERED. The Court of Appeals affirmed the decision of the Regional Trial Court (formerly the Court of First Instance) of Dagupan City. Branch 43. Juan and Catalina.R. The Rules of Court specifically provides that “The court shall consider no evidence which has  not been formally offered…” The alleged declaration not having been formally offered in evidence is deemed to be a mere scrap of paper which has no evidentiary value. The action while respecting the registration decree as incontrovertible.  . It has been held that a trustee who obtains a Torrens title over the property held in trust by him for another cannot repudiate the trust by relying on the  registration. Gavina Laranang. Petitioners cannot rely on the registration of the disputed property and the corresponding issuance of a certificate of title in their name as vesting ownership on them simply because an express trust over the property was created in favor of respondents. The law safeguards the rightful party’s interest in titled land from fraud and im proper technicalities by allowing such party to bring an action for reconveyance of whatever he has been deprived of as long  as the property has not been transferred or conveyed to an innocent purchaser for value. the undisputed facts and the applicable law ineluctably support the conclusion that the appellate court did not commit any reversible error. reconveyance is a  remedy granted only to the owner of the property alleged to be wrongfully titled in another’s name. a party seeks to show that the person who  secured the registration of the questioned property is not the real owner thereof. leaving Juan his lone heir. Catalina predeceased her father Jacobo who died sometime in 1935. He did not have offsprings by his second and third wives. That may be true but the circumstance does not suffice to warrant the reversal of the Court of Appeals’ Decision. Locsin. WHEREFORE. This is a piece of factual evidence which should have been presented before the trial court to be considered and to allow respondents the opportunity to rebut it or to present evidence to the contrary.” In a further effort to bolster the claim that they own the property in dispute. dated April 24. CV No. petitioners attempt to introduce new evidence annexed to their petition in the form of a purported declaration made by Eulogio  dated 19 February 1979. Ringor v. 2000 of the Court of Appeals in  CA-G. he had two children. Pangasinan. The argument begs the question. Reconveyance is precisely the proper action for respondents to take against petitioners since the former are claiming that they are the rightful owners of the property in question. Ringor  Petitioners seek the review of the Decision dated November 27. denying the subsequent motion for reconsideration. The declaration purports to state that the previous instruments entered into  by him and the petitioners are void because he had already sold the lot to them. Quite the contrary. although annexed to the Petition for Review appears nowhere in the records of the trial court and the appellate court. By filing an action for reconveyance. not petitioners. in favor of herein respondents. for partition and reconveyance of land with damages.
When Jacobo died on June 7. 1928. Agapito. Genoveva and Agapito are represented in this case by Teofilo Abalos and Marcelina Ringor. dated November 6. 1923. Jacobo allegedly sold and transferred to Jose his one-half (½) undivided interest in Parcel 1 covered by OCT No. Juan. 23689 was issued in the names of  Jacobo and Juan. or his grandson Jose.000. assumed and continued the administration of  . G. Jacobo’s thumbmark  appeared on the Compraventa. as the eldest grandchild. applying jointly with him. 23643. While Jacobo was the only applicant in Expediente 241. These lands are now covered by TCT No. and with the same circumstances as the Compraventa in Parcels 1 and 2. including those which petitioners sought to partition in their counterclaim before the trial court. During trial. They had seven (7) children.L. 119562 awarded full ownership of Parcel 3 to Jacobo. OCT No. witnesses attested that even after the decisions in the three land registration cases and the Compraventas. TCT No. Cresencia and Felimon Almasen. The first application. Jacobo did not partition the lands since the latter said that he  still needed them. 1935. in Decree No. In the second application. With Jacobo’s thumbmark. 5090 was issued in the name of   Jose. Heirs of Jose M. OCT No. Ringor. docketed as Expediente 241. Thus. 1921. it later appeared that Jose’s name was substituted for Juan’s name because of an erroneous  information that Jose was the only successor-in-interest of Juan. 65500.O. 1922. 13152 was applied for alone by Jacobo. in Decree No. half of Parcel 1 was adjudicated to Jacobo and the other half to Jose and later. in a Compraventa dated November 3. Although Juan was one of the named applicants. He unfailingly gave a share of the produce to all the 7 children of his son  Juan. 119561. 1928. a year before the decision of the land registration court was issued. On March 6. 1928. 1918. On October 10. The  sale to Jose was registered only on February 15. OCT No. By another Compraventa also dated November 3. Record No. the one-half (½) undivided interest of Jacobo in the said Parcels 1 and 2 was sold and transferred to Jose. the lands under the three land registration applications. 1928.R. G. G. By another Compraventaalso dated November 6. Decree No. on February 29. 1940. Inc. Jacobo allegedly sold to Jose for P800 all the lands declared to him  in Expediente 4449. 18797 was issued  exclusively to Jose. Espirita is represented by her children. Thus. Genoveva. 147191. Jacobo named Jose as the applicant. Avelina. 15918.Juan married Gavina Marcella. organized after the initiation of the instant  case. Jacobo applied for the registration of his lands under the Torrens system.L. the five (5) parcels of land inExpediente 244 were adjudicated to Jose as a  “donacion de su abuelo” (donation of his grandfather). Felipa. 25886 were likewise sold and transferred to Jose. remained undivided. Record No. Subsequently. Jose. According to witness Julio Monsis. 13168. 25885. OCT Nos. Parcels 1 and 2 of the lands in Expediente 241 were adjudicated to Jacobo and his son. 15916. Jacobo remained in possession of the lands and continued administering them as he did prior to their registration. The Compraventas were duly registered sometime in 1940. The OCT was eventually cancelled and replaced by TCT No. namely: Jose (the father and predecessor-in-interest of herein petitioners). in a Compraventa dated November 6. Thereafter. 1928. 1924. The OCTs were cancelled and new TCTs were issued in the name of Jose. In Decree No. It covered three parcels of land. the three-fourths (¾) undivided interests of Jacobo in Parcels 2 and 3 covered by OCT No.R. On April 18. Emeteria and Espirita.O. Juan died on July 16. Record No. the entire interest of Jacobo in Parcel 3 was likewise sold and transferred to Jose. Expediente 244.  25885 and 25886 were issued in the names of Jacobo and Jose respectively. with his son Juan. 1922.R. on November 22. Concordia.L.. their respective children. in the name of petitioner corporation. All the lands declared to Jacobo in Expediente 241 were allegedly sold to Jose for P6. was issued in Jacobo’s name.O. in  equal shares as pro-indiviso co-owners. three-fourths (¾)  of parcels 2 and 3 to Jacobo and one-fourth (¼) to Jose. was filed in the  names of Jacobo and his only son Juan. 23690 pertaining  to Parcel 3. He filed three land registration cases alone. The third application docketed as Expediente 4449.
The  petitioners refused and attempts at amicable settlement failed. They claimed that Jose had long acquired indefeasible and incontrovertible title to the said properties in accordance with the provisions of the Land Registration Act. The other disputed lands sought to be divided. it had long been barred by prescription and laches and/or prior judgments since it is an incontrovertible fact that Jose had been. 93019 issued November 22. if any. as well as liability for administering these properties from the time of Jose’s death up to the time  the case is terminated. 1922 for Plan Psu-15467. and declared for tax purposes in the name of Jose Ringor. Plan Psu-6095. On March 27. every time they did. 1973. uninterrupted and exclusive possession and enjoyment of the said parcels of land in the concept of an owner at varying times since 1917. (3) that after Jacobo’s death. herein petitioners insisted that they rightfully own and possess the disputed lands. 2. 1973. These are evidenced by OCT No. 5. were held by Jose as exclusive owner. 1940 for Lots Nos. In their Amended Answer. and 1928. respectively. In their Answer. petitioners asserted that respondents’ claim of express trust concerning the properties in question could not be proved by parol evidence. 1971. he was survived by his  . 1940 for Lots Nos. m. When Julio died on February 3. 15918 issued February 15. and the six children and grandchildren of Juan Ringor. homestead patent. now TCT No. herein respondents claimed that (1) they are all grandchildren and/or great grandchildren of Jacobo. their share in  the produce and income from the lands. including those based on constructive trust. 1940 for Plan Psu-31271. 5090 issued December 12.” Respondents explained that they did not zealously press for the immediate partition of the lands because Jose constantly assured them that he  would never cheat them and because they respected him highly. 1929 for Lot No. the exclusive registered owner of the  registered properties. 1977. and (c) the payment of attorney’s fees. according to petitioners. 1971. 3. 18797 issued March 6. (2) that the  late Jose Ringor had always been the administrator and trustee of Jacobo. petitioners assured. While trial of the case was in progress.775 sq. He also conscientiously gave his 5 younger sisters and only brother Agapito. or purchase. who left intestate the disputed lands with a total area of 322. whatever cause or right of action. Pangasinan. as evidenced by the certificates of title issued more than thirty (30) years ago and in some cases more than fifty (50) years ago. TCT No. 18797 issued in the name of Jose Ringor under Expediente 244 and that these be subdivided among the seven children of Jose Ringor. 1. they asked for their shares of the intestate properties but was refused. Herein respondents claim they repeatedly asked Jose for partitioning of the land. 1 & 2. So did Leocadia Ringor. all located in San Fabian. Plan Psu-6095 Amd. the partition and delivery of their share in the estate left by Jacobo and under Jose’s administration. Julio Monsis. They asked for (a) the partition of their corresponding shares. respondents filed a Complaint for partition and reconveyance with damages. however. 3. 1 & 2. petitioners averred that the parcels of land in the exclusive name of Jose are his exclusive properties acquired by him either by inheritance. They claimed that Jacobo sold the parcels of land under Expediente Nos.the lands. herein petitioners. 1928. D-3037. Further. the cancellation of OCT No. alleging he was the only child of Macaria Discipulo and Jacobo. and TCT No. 1923. 4. for more than thirty (30) years and in some cases for more than fifty (50) years. (b) the payment to plaintiffs of whatever maybe found as chargeable to the late Jose Ringor as trustee. 23797 on May 6. Lastly.  An Amended Complaint was admitted by the lower court in its Order of August 6.. OCT No. docketed as Civil Case No. alleging she was the only child of Jacobo with Marcelina Gimeno. TCT No. 4449 and 241 to Jose for valuable consideration on November 3 and 6. before the present suit was instituted by respondents. Plan Psu-35491. TCT No. filed a Complaint in Intervention. the respondents had with respect to the properties owned and possessed by them and their late father. Jose died on April 30. Respondents demanded from Jose’s children. Plan Psu-6099. 15916 issued February 15. They alleged that their father acquired legitimate title to and remained in continuous. 15917 on February 15. 1919 for Lots Nos. evidenced by notarial deeds of sale duly registered in the Registry of Deeds of Pangasinan. surveyor’s expenses and cost of th e suit. Jose always answered that it was not going to be  easy because there would be “big and small shares. and (4) that Jose as trustee and overseer of all these properties was answerable to the respondents for their just shares in the  intestate properties of Jacobo. In their Complaint.
wife Felipa and their legitimate children Maria. On Expediente 4449. 18797 (Lots 1. On July 8. 15918. Ringor. produce and rents on these parcels of land from 1973 until the respective shares of the plaintiffs are physically and peacefully delivered to each of them. as pro-indiviso coowners of all the lands covered by Expediente Nos. (e) Dismissing the Complaints-in-Intervention of Julio Mon[sis] and Leocadia Ringor. 15917 and 18797. (f) On the Counterclaim. 4 and 5 of this decision brought under the Land Registration Act and now covered by TCT No. Concordia. the trial court observed that the document evidencing that Jacobo donated the lands therein to Jose was never presented to the registration court. Agapito. Felipa. Expediente 2449). TCT No. It found that Jose held the subject lands as co-owner and trustee of the express trust. Genoveva. 244 and 4449 described in pages 2. in the name of Jose Ringor. the donation was declared invalid. (d) Ordering defendants jointly and severally to pay the plaintiffs the sum of P50. (g) Ordering the defendants to pay the costs of suit. More important. Inc. 1982. the trial court declared that Jacobo continued to occupy and exercise acts of ownership over the same parcels of land until his death despite the supposed sale to Jose. 15917 (Lots 2 and 3. namely: Jose. Emeteria and Espirita. herein respondents filed an Amendment to their Amended  Complaintimpleading as additional party-defendants. (Lot 1. 3. the Heirs of Jose M. TCT No. 15916. Expediente 4449). 4 and 5. On February 10. among Jose. 241. Inc. The dispositive portion of the Decision set forth its judgment: (a) Declaring the 7 children of Juan L. all of the Register of Deeds of Pangasinan. SO ORDERED. Ringor who are the grandchildren of Jacobo Ringor. Concordia. On Expediente 244. Agapito. ordering the partition in seven (7) equal shares the parcels of land described in paragraph 34 (a and b). nor was any explanation given for the failure to register the alleged donation. Genoveva. 2. Ringor. 3. Eusebio. who died a year before the application was adjudicated. Agapito. all surnamed Ringor. Emeteria and Espirita. It noted that Jose registered the deed of sale twelve years after their execution and five years after Jacobo’s death. Emeteria and Espirita. (b) Ordering the partition of the said parcels of land covered by TCT Nos. the RTC decided in favor of respondents. 5090. Concordia. The trial court held that the notarial deeds of sale executed between Jacobo and Jose in Expediente 241 were false and simulated. 15916 in the name of defendant Heirs of Jose M. pages 14 and 15 of this decision. 15918 (Lots 1 and 2) and TCT 5090 (Lot No.00 for attorney’s fees. . Panfilo and Fermin. Federico. when in fact Juan had seven children. Expediente 244). 1995. the land was erroneously adjudicated to Jacobo and Jose because it was made to appear that Jose was the only child who succeeded Juan. Genoveva. the trial court observed that although the applicants were Jacobo and Juan. Jacobo knew of this error. among Jose. all surnamed Ringor. yet he did nothing to correct it. Felipa. all surnamed Ringor into 7 equal parts. Hence.000. all surnamed Monsis. and TCT No. (c) Ordering defendants to render an accounting to the plaintiffs of all the income. Paciencia. 3) in the name of Jose Ringor (Expediente 241). Felipa.  The trial court concluded that Jacobo created an express trust over his entire property in favor of his grandchildren.
4. WHETHER OR NOT THE TRIAL COURT’S RULINGS AS THE SAME WERE AFFIRMED ON APPEAL BY THE COURT A QUO. Now before us the petitioners. WHETHER OR NOT THE COURT A QUO ERRED IN AFFIRMING THE TRIAL COURT’S RULING ADMITTING AND GIVING WEIGHT AND CONSIDERATION TO THE PAROL EVIDENCE ON RECORD TO PROVE THE EXISTENCE OF AN EXPRESS TRUST. Jose continued Jacobo’s practice of sharing the produce of the land with his siblings. and (2) it gave weight to the oral evidence of herein respondents to prove the existence of an express trust in their favor. a recognition that even Jose considered that his siblings were beneficial co-owners  of the lands under his care. petitioners contended that the lower court erred when (1) it ruled that Jacobo Ringor constituted an express trust over the disputed properties abovecited in favor of respondents as the beneficiaries and with Jose Ringor as trustee. WERE ANCHORED ONLY ON PAROL EVIDENCE. all these lands belonged to him such that notwithstanding the subsequent compraventas. as trustee. he continued to possess and administer the lands and all the profits from them were at his disposal. Before the Court of Appeals. 6. The trial court reasoned that despite the absence of a document proving the express trust. 2. AS THE SAME WAS AFFIRMED BY THE COURT A QUO. 1443 OF THE NEW CIVIL CODE CAN BE WAIVED. it could be deduced that the compraventas were without consideration and this was why the compraventas were not registered during Jacobo’s lifetime. raise the following issues: 1. THAT AN EXPRESS TRUST WAS ESTABLISHED BY THE LATE JACOBO RINGOR OVER THE PARCELS OF LAND IN QUESTION IN FAVOR OF THE RESPONDENTS AS THE BENEFICIARIES. 3. . WHETHER OR NOT THE FACTUAL FINDINGS OF THE TRIAL COURT WHICH WERE AFFIRMED IN TOTO BY THE COURT A QUO ARE SUPPORTED BY. and since the trust continued to exist. INSTRUMENT. The trial court noted that even after the registration of the compraventas.The trial court concluded that all these incidents and circumstances served as indicia that Jacobo cared little if the lands were in his name or someone else’s. Furthermore. an action to  compel the trustee to convey the properties has not prescribed nor is it barred by laches. such that the trust remained. OR CONTRARY TO. 5. WHETHER OR NOT THERE IS A DOCUMENT. in their Memorandum. The Court of Appeals affirmed the lower court’s decision. WHETHER OR NOT THE ADMISSION OF PAROL EVIDENCE TO PROVE EXPRESS TRUST AS PROSCRIBED BY ART. it said that Jose. the same  was proven by parol evidence. the trial court continued. DEED OR ANY WRITING CREATING AN EXPRESS TRUST AND FORMING PART OF THE EVIDENCE ON RECORD WHICH SUPPORTS THE FINDINGS OF THE TRIAL COURT. THE EVIDENCE ON RECORD. Thus. did not repudiate the trust. from the acts of Jacobo and his full exercise of dominion over the lands until his death. The trial court explained that the prohibition in Article 1443 of the New Civil Code – that no express trust concerning an immovable or any interest therein may be proved by parol evidence – is a prohibition for purposes of presenting proof on the matter. WHETHER OR NOT THE COURT A QUO ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT PETITIONERS VALIDLY WAIVED THEIR OBJECTION TO THE ADMISSION BY THE TRIAL COURT OF PAROL EVIDENCE AS PROOF OF THE ESTABLISHMENT OF AN EXPRESS TRUST. until his own death. As far as he was concerned. The Motion for Reconsideration of petitioners was also denied. WITH JOSE RINGOR AS THE TRUSTEE THEREOF (AND CO-BENEFICIARY AT THE SAME TIME). but it could be waived by  a party. It went on to say that the failure to object to parol evidence during trial and the crossexamination of the witnesses is a waiver of the prohibition.
1441. and they claimed that they objected. 244 and 4449 and the three Compraventas as documentary proofs that an express trust was created by Jacobo. for an express trust over an immovable to exist. Petitioners aver that these elements are indispensable for an express trust to exist. (3) the trust res. and  1446. Respondents. According to them. instrument or document expressly declaring that a trust was constituted. WHETHER OR NOT THE COURT A QUO COMMITTED SERIOUS ERRORS AND GRAVE ABUSE OF DISCRETION IN VIRTUALLY ORDERING THE NULLIFICATION AND/OR DECLARING THE NULLITY OF --. 1597.ALL THE TITLES (TCT NO. instrument or document that Jacobo intended to create a trust. insist that the intent to create a trust must be in writing. petitioners urge this Court to review the factual findings of the case. and move on to the resolution of the other issues. Respondents cite the three applications for registration of the lands referred to the Expedientes 241.WHETHER OR NOT THE COURT A QUO ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION IN DECLARING THE SUBJECT PARCELS OF LAND AS BELONGING TO THE INTESTATE ESTATE OF JACOBO RINGOR AND UNDER THE CO-OWNERSHIP OF JOSE RINGOR AND THE RESPONDENTS. absent any palpable error or patent arbitrariness. 1444. from the beginning. the issues to be resolved in this petition are: (1) Were the factual findings of the lower and appellate courts supported by evidence on record? (2) Was there a valid express trust established by Jacobo Ringor? (3) May parol evidence be used as proof of the establishment of the express trust? (4) Did the court in effect nullify the Torrens titles over the disputed parcels of land? (5) Were respondents’ action barred by prescription and laches? We shall now address these issues together. AND TCT NO. namely: (1) a trustor or settlor who executes the instrument creating the trust. consisting of duly identified and definite real properties. who is the person expressly designated to carry out the trust. In this case. AND THE FOUR (4) DULY NOTARIZED COMPRAVENTAS EXECUTED BY JACOBO RINGOR IN FAVOR OF JOSE RINGOR COVERING THE PARCELS OF LAND DESCRIBED THEREIN. and (4) the cestui que trust. Briefly stated. that in an appeal via certiorari only questions of law may be raised. At the outset. 93019) OF JOSE RINGOR AND HIS SUCCESSORSIN-INTEREST (THE PETITIONERS HEREIN) AND DIVESTING THEM OF THEIR EXCLUSIVE OWNERSHIP OVER THE PARCELS OF LAND IN QUESTION. AND --. argue that Jacobo created an express trust. in their petition. 1443. The findings of fact of the lower court are conclusive on us. Petitioners anchor their assertion on the Civil      Code. AND IN ORDERING THEIR PARTITION AMONG THE SEVEN CHILDREN OF JUAN RINGOR. for their part. THE DECISIONS OF THE LAND REGISTRATION COURTS IN EXPEDIENTE 244 AND 4449. WHETHER OR NOT RESPONDENTS’ ACTION WAS ALREADY BARRED BY  PRESCRIPTION. Petitioners then lament that respondents did not present during trial or even attach to the records of the case. 1445. 5090. as they point out that in these provisions. 15918. BOTH ACQUISITIVE AND EXTINCTIVE. generally be reviewed by this Court. we find no tenable route but to leave the findings of fact of the lower courts untouched. Petitioners. to the introduction of any oral testimony to prove the establishment of an express trust. AND LACHES. Petitioners’ main contention is that the trial and appellate co urts had no basis to conclude that Jacobo constituted an express trust because respondents did not present any deed. 18797. TCT NO. OCT NO. (2) a trustee. however. The findings of fact of the Court of Appeals – especially when not at variance with those of the trial court – may not. this conclusion can be gleaned clearly when Jacobo exercised acts of ownership over all the .7. AND THE PRINCIPLES OF RES JUDICATA AND THE INDEFEASIBILITY OF A TORRENS TITLE. IN VIOLATION OF THE APPLICABLE PROVISIONS OF THE CIVIL CODE. any deed. 8. four elements must be present. TCT NO. or beneficiaries whose identity must be clear. particularly their interpretation of Articles 1440. It is a well established principle. THE DONATION REFERRED TO IN THE DECISION IN EXPEDIENTE 244.
241 and 4449. is not to be construed as precluding a creation of a trust by oral agreement. the objection to the oral character of a trust may be overcome or removed where there has been partial performance of the terms  of the trust as to raise an equity in the promisee. or  from the circumstances surrounding the creation of the purported trust. such intention may be manifested by inference from what the trustor has said or done. not only did he fail to repudiate the trust. he also assured his co-heirs that it was the inconvenience of partitioning that kept him from transferring the shares of his siblings to them. such as the Statute of Frauds. ororal declaration. it being sufficient that a trust was clearly intended. Thus.. transferring all the lands in Jose’s name. the oral testimonies of witnesses Emeteria Ringor. and  if he does.disputed lands even after the alleged donation and deeds of sale in favor of Jose. Julio Monsis and Teofilo Abalos . Under the doctrine of partial performance recognized in this jurisdiction. However. uncertain or indefinite declarations. when a verbal contract has been completed. (3) Jacobo did not want to partition the lands because he was still using them. From all these premises and the fact that Jose did not repudiate the claim of his co-heirs. when Jacobo transferred these lands to Jose. including herein respondents. can  be made only where they admit of no other interpretation. its enforceability will  not be barred by the Statute of Frauds. Express trusts. executed or partially consummated. must be made with reasonable certainty. or will. it can be concluded that as far as the lands covered by Expediente Nos. on the lands covered in Expediente 244. Such a statute providing that no instruments concerning lands shall be “created” or declared unless by written instruments signed by the party creating the trust. 241 and4449 are concerned. a practice Jose continued until three years before his death. but by the direct and positive acts of the parties. Jacobo continued t o perform all the acts of ownership including possession. an express trust exists with Jose Ringor as trustee in favor of all the heirs of Jacobo Ringor. (4) when Jacobo died. the beneficiary is protected in benefits that he has received from such performance. and when Jacobo religiously gave shares of the income and produce of the disputed lands to the respondents. they pose no hindrance or limitation to the enforcement of an  express trust. predicated only on circumstances. credible witnesses testified that (1) the lands subject of Expedientes 241 and 4449 were made and transferred in the name of Jose merely for convenience since Juan predeceased Jacobo. made from language. As far as prescription or laches are concerned. we note that as a “donacion de su abuelo. . An inference of intention to create a trust. While oftentimes the intention is manifested by the trustor in express or explicit language. in what the lower court said were simulated or falsified sales. in recognition of their share as co-owners. with respect to the lands covered by Expediente Nos. oral testimony is allowed to prove that a trust exists. What is crucial is the intention to create a trust. that it was not going to be an easy task. Finally. but merely as rendering such a trust  unenforceable.which the appellate court also relied on to arrive at the conclusion that an express trust exists. an inference of the intention to create a trust. or by his attorney. use and administration of the lands. Unless required by a statutory provision.. Noteworthy. conduct or  circumstances. A trustee may perform the provisions of the trust. Accordingly. Jacobo’s intention impressed upon the titles of Jose a trust in favor of the true party-beneficiaries. No  particular words are required. (2) despite the Compraventas. Furthermore. Nevertheless.e. It cannot rest on vague. deed. despite the compraventas transferring the lands in his name.” the donation impaired the hereditary rights of succession of Jose’s co-heirs. In the present case. are intentionally created by the direct and  positive acts of the settlor or the trustor – by some writing. from the nature of the transaction.. a writing is not a requisite for the creation of a  trust. It is not error for the court to rely on parol evidence. these were . sometimes referred to as direct trusts. Contrary to the claim of petitioners. which applies only to an executory agreement.i. and (5) Jose did not repudiate the claim of his siblings and only explained upon their expression of the desire for partitioning. Jose took over the administration of the lands and conscientiously and unfailingly gave his siblings their share in the produce of the lands. It is created not necessarily by some written words. Jose unfailingly gave his siblings their share of the produce of the lands.
Despite the registration in Jose’s name. Jacobo retained possession. To allow prescription would be tantamount to allowing a trustee to acquire  title against his principal and true owner. for the wrong result they seek. He did not intend to relinquish his rights to the lands. and he had no other means for his alleged purchases. The Torrens system does not create or vest title. Jose did not take possession over them from the date of registration to the time of Jacobo’s death. “[t]here is also an implied trust when a donation is made to a person but it appears that although the legal estate is transmitted to the donee. It does not permit one to enrich himself at the expense of another. The trial court noted that the documents evidencing the donations were never presented for registration simply because there was never a donation to Jose and because at the time the application was filed. The trial court found in favor of herein respondents’ claim that the deeds of sale that caused the registration of the TCTs in Expedientes 241 and 4449 in Jose’s name were invalid. we find no reversible error in the assailed decision of the appellate court.” Article 1449 creates a resulting trust where the donee be comes  the trustee of the real beneficiary. The donation was allegedly made merely to facilitate  the registration of the lands in Jose’s name. nor gainfully employed in the government or in the private sector. Petitioners contend. Article 1449 of the New Civil Code on implied trusts is the pertinent law. Jacobo’s only son. He was never in business. however. The trial court also found that Jose owned only about three hectares of land which he farmed. As found by the trial court and sustained by the appellate court. the action to reconvey does not prescribe so long as the property stands  in the name of the trustee. notwithstanding the irrevocability of the Torrens title. violates the principle of res judicata and the indefeasibility of the Torrens title. simulated and clearly without consideration. and continued the administration of the lands. which persuasively convince us that the transfers of the lands in Expedientes 241 and 4449 were simulated sales. Inc. and it was to be understood that Jose was merely a trustee. In fine. Considering then these circumstances. The intended trust must be sustained. It does  not protect a usurper from the true owner. We are in agreement in sustaining the findings and conclusions of the court a quo. Inc. We are not inclined to disturb these findings and conclusions of the trial court. Nothing is farther from the truth than this contention. the Torrens system of registration can confirm or  record nothing.. and in Expediente 244 the transfers were invalid donations. Juan. was still alive. A Torrens Certificate of Title in Jose’s name did not vest ownership of the land upon him. we sustain its findings on the invalidity of the deeds of sale for being simulated and false. it was merely for convenience that Jacobo registered the lands in the name of Jose.transferred to Jose by final judgment of the land registration court. A trustee who obtains a Torrens title over a  property held in trust for him by another cannot repudiate the trust by relying on the registration. and the titles of the disputed lands are still registered in Jose’s name or in the name of the Heirs of Jose M. resulting trusts do not prescribe except when the trustee  repudiates the trust. he nevertheless is either to have no beneficial interest or only a part thereof. Ringor. It only confirms and records title already existing and vested. Jose did not repudiate the trust. The deeds were false. Here. Further. Petitioners cannot rely on the registration of the lands in Jose’s name nor in the name of the Heirs of Jose M. His intention was clearly to keep the lands for himself until his death. The Torrens system was not intended to foment betrayal in  the performance of a trust. Ringor. . For Jose could not repudiate a trust by  relying on a Torrens title he held in trust for his co-heirs. As for the donations of the lands in Expediente 244. the basis of which was an alleged “ donacion de su abuelo” the trial court concluded they were invalid donations because no deed of donation was ever shown. sustained by the Court of Appeals. Instead. Neither were the children of Jose  propertied nor employed. that the court a quo virtually nullified all the land titles in Jose’s name when it declared that the disputed lands belong to the intestate estate of Jacobo and Jose and his siblings were co-owners thereof. while alive. It provides that. To recapitulate. Generally. This. petitioners aver. Where one does not have a rightful claim to the property. The beneficiaries are entitled to enforce the trust.
4 Likewise challenged is the October 14. is hereby AFFIRMED. SECUYA v. Branch 43. Ordering the plaintiffs to vacate the premises in question and turn over the possession of the same to the defendant Gerarda Selma.000 as moral damages. Petitioners asserted ownership over the disputed parcel of land. The CA ruled: WHEREFORE. In the present case. but that the have a valid title to it. litigation expenses of P5. 1998 Decision of the Court of Appeals 1 2 (CA) in CA-G.R. 11 and to pay the costs of this suit.nêt SO ORDERED. which affirmed the judgment of the Regional Trial Court (RTC) of Cebu City. de Selma. de Selma and damages. 2217.00. the same is hereby 3 AFFIRMED in toto. Corazon. Costs against petitioners. the petition is DENIED for lack of merit.00 pursuant to Art. Cancellation of Certificate of Title of Gerarda vda.000. this court hereby finds the preponderance of evidence to be in favor of the defendant Gerarda Selma as judgment is rendered: 1. The decretal portion of the trial court Decision reads as follows: WHEREFORE. 1998 CA Resolution which denied petitioners' Motion for 5 Reconsideration.WHEREFORE. 2000 of the Court of Appeals. Marcelino. CV No. according to Art. De Selma In action for quieting of title. the action must fail. 3. alleging the following facts: . The Case Before us is a Petition for Review seeking to set aside the July 30. Rufina. in view of all the foregoing [evidence] and considerations. 2208 No. attorney's fees of P15. affirming the Decision of the Regional Trial Court. The Decision dated November 27. 38580. The Facts The present Petition is rooted in an action for quieting of title filed before the RTC by Benigna. Gliceria and Purita — all surnamed Secuya — against Gerarda M. formerly the Court of First Instance of Dagupan City. Dismissing this Complaint for Quieting of title. because petitioners failed to show the requisite title. Bernardino. Vda. SO ORDERED. vda. Miguel. [there being] no error in the appealed decision.1âwphi1. 2. Requiring the plaintiffs to pay defendant the sum of P20.000. the plaintiff must show not only that there is a cloud or contrary interest over the subject real property. Natividad.
whereby the former bound herself and parted [with] one-third (1/3) portion of Lot 5679 in favor of the latter (Exh. Such sale was admitted and confirmed by Ramon Sabellona. Among others it was stipulated in said agreement of partition that the said portion of one-third so ceded will be located adjoining the municipal road (par. only heir of Paciencia Sabellona. evidenced by Exhibit "P". Dalmacio. "K"). "C"). "B").000 square-meter portion of Lot 5679. defendant-respondent Selma was asserting ownership over the land inherited by plaintiffs-petitioners from Dalmacio Secuya of which they had long . by means of a private document which was lost (p.xxx xxx xxx 8.000-square meter portion of Lot 5679. "F"). 1976(Exh. nephews and nieces — are the plaintiffs in Civil Case No. 1953. Orozco (Exh. 8. together with his brothers and sisters — he being single — took physical possession of the land and cultivated the same. CEB-4247 and now the petitioners. 13. Dalmacio Secuya died on November 20. Later..750 square meters. Exh "D"). Ramon Sabellona inherited all the properties left by Paciencia Sabellona. to Maxima Caballero Vda. 1975. 8. Pursuant to such will. vendee and patentee of Lot 5679. predecessor-in interest of plaintiffs of the property in litigation on October 20. 1985. and had the plaintiffs-petitioners summoned. Villarmina (Exh. per that instrument denominated CONFIRMATION OF SALE OF UNDIVIDED SHARES. 1953. In 1972. Edilberto Superales constructed his house on the lot in question in January 1974 and lived thereon continuously up to the present (p. 15. Lot 5679 has an area of 12. she entered into that AGREEMENT OF PARTITION dated January 5. The land in question. referred to and covered [o]n Page 279. Then on February 19. "K-2). is embraced and included within the boundary of the later acquisition by respondent Selma.. In 1967. defendant-respondent Gerarda Selma bought a 1. 5.00).850. a 3. sisters. marked as Exhibit "5". 9. 14. for a consideration of ONE THOUSAND EIGHT HUNDRED FIFTY PESOS (P1. "K-1". per Certification dated August 10. de Cariño (Exhs. After the purchase [by] Dalmacio Secuya. dated July 9.302 square meters. Ramon Sabellona was the only [or] sole voluntary heir of Paciencia Sabellona. 1961. tsn 7/25/88 — Daclan). Edilberto Superales married Rufina Secuya. she bought the bigger bulk of Lot 5679. per that KATAPUSAN NGA KABUT-ON UG PANUGON NI PACIENCIA SABELLONA (Last Will and Testament of Paciencia Sabellona). tsn. dated September 28. 12. During the lifetime of Maxima Caballero. evidenced by that deed of absolute sale. by Geodetic Engineer Celestino R. and in the confrontation and conciliation proceedings at the Lupong Tagapayapa. executed and acknowledged before Notary Public Teodoro P. With the permission and tolerance of the Secuyas. Paciencia Sabellona took possession and occupation of that one-third portion of Lot 5679 adjudicated to her. before the Barangay Captain of the place. she sold the three thousand square meter portion thereof to Dalmacio Secuya on October 20. along lines 18-19-20 of said lot. and the covering patent issued. more or less. niece of Dalmacio Secuya. consisting of 9. Friar Lands Sale Certificate Register of the Bureau of Lands (Exh. 10. 8/8/89-Calzada). 11. Thus his heirs — brothers. 1938 with Paciencia Sabellona. "D"). The property was originally sold. 1954. The parcel of land subject of this case is a PORTION of Lot 5679 of the Talisay-Minglanilla Friar Lands Estate. Defendant-respondent Gerarda Selma lodged a complaint. Said house is inside Lot 5679-C-12-B.
on the other hand. No. Such claim of defendant-respondent Selma is a 6 cloud on the title of plaintiffs-petitioners. having bought the same sometime in February 1975 from Cesaria Caballero as evidenced by a notarized Deed of Sale (Exhibit "5".750 square meters of the Talisay-Minglanilla Friar Lands Estate. the implications of the Agreement of Partition. the appellate court debunked petitioners' claim of ownership of the land and upheld Respondent Selma's title thereto. and third. 324). For a clearer understanding of the above matters. On the other hand. Cesaria Caballero. petitioners urge the Court to resolve the following questions: 1.] and 2.302 square meters as evidenced by TCT No. in concept of owner. 5679 was adjudicated to the widow. The CA Ruling In affirming the trial court's ruling. hence. p. . we will divide the issues into three: first. Hence. the validity of private respondent's title. T-35678 (Exhibit "6". It held that respondent's title can be traced to a valid TCT. this Petition. it ruled that petitioners anchor their claim on an "Agreement of Partition" which is void for being violative of the Public Land Act. which is a portion of Lot 5679. 340). 5679 with an area of 12. Whether or not there was a valid transfer or conveyance of one-third (1/3) portion of Lot 5679 by Maxima Caballero in favor of Paciencia Sabellona. Record. vda. . the validity of the Deed of Confirmation of Sale executed in favor of the petitioners. was summarized by the appellate court as follows: She is the registered owner of Lot 5679-C-120 consisting of 9. by virtue of [the] Agreement of Partition dated January 5. 323) and ha[ve] been in possession of the same since then. The Court's Ruling The Petition fails to show any reversible error in the assailed Decision. 341) wherein onehalf plus one-fifth of Lot No. Record. 4752 (Exhibit "10". their complaint (Annex "C"). 1938[. p.been in possession . Lot. his heirs executed an "Extrajudicial Partition and Deed of Absolute Sale" (Exhibit "11". as shown by Transfer Certificate of Title No. second. Preliminary Matter: The Action for Quieting of Title . Whether or not the trial court. The CA noted that the said law prohibited the alienation or encumbrance of land acquired under a free patent or homestead patent. committed grave abuse of discretion amounting to lack of jurisdiction in not making a finding that respondent Gerarda M. as well as the court. Cesaria Caballero was the widow of Silvestre Aro. Record. registered owner of the mother lot. for a period of five years from the issuance of the said patent. p. Record. Respondent Selma's version of the facts. Upon Silvestre Aro's demise. de 9 Selma [was] a buyer in bad faith with respect to the land. p. 8 The Issues In their Memorandum. from whom 7 defendant-appellee derives her title.
Luis Caballero. Manila. claim. This point is clear from Article 476 of the Civil Code. I hereby bind myself to transfer the one-third (l/3) portion of the above mentioned lot in favor of my aunt. the plaintiffs or complainants must demonstrate a legal or an equitable title to. 5679-C-120. 2. Secretary of Agriculture and Commerce.000 — square-meter portion of Lot No. issued in the name of Private Respondent Selma. Talisay. for private sale in my favor. That the said Lot 5679 was formerly registered in the name of Felix Abad y Caballero and the sale certificate of which has already been cancelled by the Hon. do petitioners have the requisite title that would enable them to avail themselves of the remedy of quieting of title? Petitioners anchor their claim of ownership on two documents: the Agreement of Partition executed by Maxima Caballero and Paciencia Sabellona and the Deed of Confirmation of Sale executed by Ramon Sabellona. as Luis Caballero has no means o[r] any way to pay the government. which is a 3. That for and in representation of my brother. Likewise. petitioners allege that TCT No.In an action to quiet title. of legal age. an action may be brought to remove such cloud or to quiet title. of legal age. First Issue: The Real Nature of the "Agreement of Partition" The duly notarized Agreement of Partition dated January 5. 10 or an interest in. Filipina. Cebu. But the underlying question is. In the case at bar. is a cloud on their title as owners and possessors of the subject property. ineffective. which reads: Whenever there is cloud on title to real property or any interest therein. An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. they must show that the deed. who is now the actual occupant of said lot I deem it wise to have the said lot paid by me. Paciencia Sabellana y Caballero. Oriental Negros. encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid. 1938. 5679-C-120 covered by the TCT. That I am the applicant of vacant lot No. voidable or unenforceable. 4. the subject real property. We will now examine these two documents. That as soon as the application is approved by the Director of Lands. depose the following and say: 1. 5679 of the Talisay-Minglanilla Estate and the said application has already been indorsed by the District Land Officer. encumbrance or proceeding that purportedly casts a cloud on their title is in fact invalid or inoperative despite its prima 11 facieappearance of validity or legal efficacy. and may be prejudicial to said title. residing and with postal address in Tungkop. record. 3. Said portion of one-third (1/3) will be subdivided after the approval . MAXIMA CABALLERO. single. in my favor. now residing and with postal address in the Municipality of Dumaguete. is worded as follows: AGREEMENT OF PARTITION I. by reason of any instrument. Cebu. married to Rafael Cariño. claim. Minglanilla.
it being sufficient that a trust is clearly intended. Instead. Trust relations between parties may either be express or implied. Likewise. Not a Partition Notwithstanding its purported nomenclature. An implied trust comes into being by operation of 14 law. Under Article 1444 of the Civil Code. prescription may. "[n]o particular words are required for the creation of an express trust. That the said portion of one-third (1/3) will be located adjoining the municipal road.of said application and the same will be paid by her to the government [for] the corresponding portion. 3087 issued in the name of Maxima. As a result of the Agreement. 5679 Talisay-Minglanilla Estate and will pay the corresponding portion to the government after the subdivision of the same. she should have transferred the same to the latter. 5679 to Silvestre Aro in 1955. it is evident that Paciencia acquiesced to the covenant and is thus bound to fulfill her obligation therein. The present Agreement of Partition involves an express trust. Cebu. Maxima Caballero held the portion specified therein as belonging to Paciencia Sabellona when the application was eventually approved and a sale certificate was issued in her 15 name. bar a beneficiary's action for recovery. 5. hereby accept and take the portion herein adjudicated to me by Mrs. her heirs sold the entire Lot No. we have hereunto set our hands this 5th day of January. but she never did so during her lifetime. at 12 Talisay. IN WITNESS WHEREOF. Paciencia and her successors-in-interest did not do anything to enforce their proprietary rights over the disputed property or to consolidate their ownership over the same. they did not even register the said Agreement with the Registry of Property or pay the requisite land taxes. Rather. the disputed property. had been the subject of several sales 16 transactions and covered by several transfer certificates of title." That Maxima Caballero bound herself to give one third of Lot No. Maxima Caballero of Lot No. There was a repudiation of the express trust when the heirs of Maxima Caballero failed to deliver or transfer the property to Paciencia Sabellona. From 1954 when the sale certificate was issued until 1985 when petitioners filed their Complaint. Trust is the right to the beneficial enjoyment of property. the legal title to which is vested in another. 1988. 5679. It is a fiduciary relationship that obliges the trustee to deal with the property for the benefit of the 13 beneficiary. I. as part of Lot No. Thus. While petitioners had been doing nothing. The Repudiation of the Express Trust While no time limit is imposed for the enforcement of rights under express trusts. 5629 to Paciencia Sabellona upon the approval of the former's application is clear from the terms of the Agreement. In the memorandum of incumbrances of TCT No. this Agreement is not one of partition." The Agreement: An Express Trust. if a repudiation of the trust is proven by clear and 18 convincing evidence and made known to the beneficiary. 6. however. there 17 . An express trust is created by the intention of the trustor or of the parties. and instead sold the same to a third person not privy to the 19 Agreement. it is in the nature of a trust agreement. In fact. because there was no property to partition and the parties were not co-owners. Paciencia Sabellana y Caballero.
while petitioners could not present the purported deed evidencing the transaction between Paciencia Sabellona and Dalmacio Secuya. he was not presented in court and was thus not quizzed on his knowledge — or lack thereof — of the 1953 transaction. petitioners instead presented the 21 testimony of Miguel Secuya. was never presented in court. petitioners have not proven that they are the rightful successors-in-interest of Paciencia Sabellona. The Absence of the Purported Deed of Sale Petitioners insist that Paciencia sold the disputed property to Dalmacio Secuya on October 20. However. knew of it. Consequently. its probative value is doubtful. such document.was no notation of the Agreement between her and Paciencia. and a Deed confirming the sale executed by Ramon Sabellona. and that the sale was embodied in a private document. His status as heir of Paciencia was not affirmatively established. allegedly because it had been lost. private respondent in contrast has the necessary documents to support her claim to the disputed property. The Questionable Value of the Deed Executed by Ramon Sabellona To prove the alleged sale of the disputed property to Dalmacio. yet. it would seem that they had been remiss in their duty to pay the land taxes. Moreover. in the absence of proof that the said transactions were fraudulent and irregular. it cannot be considered binding on third persons. if it is not embodied in a public instrument and recorded in the 20 Registry of Property. they have should have been more vigilant in protecting their rights thereto. petitioners' immediate predecessor-in-interest. Moreover. 1953. While the Deed executed by Ramon ratified the transaction. Equally important. They argue that they had been gathering the fruits of such property. Third Issue: The Validity of Private Respondent's Title . the subsequent sales transactions involving the land in dispute and the titles covering it must be upheld. thus. If petitioners really believed that they owned the property. there is no proof that they had exercised their rights and duties as owners of the same. As noted earlier. The testimony of Miguel was a bare assertion that the sale had indeed taken place and that the document evidencing it had been destroyed. Paciencia's alleged heir. While a sale of a piece of land appearing in a private deed is binding between the parties. which would have been the best evidence of the transaction. they did nothing to enforce whatever proprietary rights they had over the disputed parcel of land. Neither was there any allegation that Silvestre Aro. it could not bind third persons. the Agreement was not registered. However. Petitioners' Failure to Exercise Owners' Rights to the Property Petitioners insist that they had been occupying the disputed property for forty-seven years before they filed their Complaint for quieting of title. who purchased the property from Maxima's heirs. one of the petitioners. Second Issue: The Purported Sale to Dalmacio Secuya Even granting that the express trust subsists.
One who falls within the exception can neither be denominated an innocent purchaser for value purchaser in good faith. assured her that petitioners were just tenants on the said lot. The title thereto had been transferred several times. Cesaria Caballero. Granting arguendo that private respondent knew that petitioners. In any case. La Union. private respondent's title is amply supported by clear evidence. CA ASSAILED in this petition for review on certiorari is the decision of the Court of Appeals which affirmed 2 with modification that of the Regional Trial Court. Moreover. alleging that she was aware of their possession of the disputed properties. and 1/3 portion of the orchard located in Nalasin. Indeed. T-29060 in the name of Ruperto L. 0-1952 in the name of Ruperto. or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the status of title of the property in litigation.nêt WHEREFORE. under OCT No. through Superales and his family. declaring petitioner and private respondents as co-owners of the 2/3 portion of the commercial lot located in Cabua-an Oeste. The aforesaid principle admits of an unchallenged exception: that a person dealing with registered land has a right to rely on the Torrens certificate of title and to dispense without the need of inquiring further except when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry. and hence does not merit the protection of the law. while petitioners' claim is barren of proof. petitioners do not have the requisite title to pursue an action for quieting of title. they insist that she could not be regarded as a purchaser in good faith who is entitled to the protection of the Torrens system. The presence of anything which excites or arouses suspicion should then prompt the vendee to look beyond the certificate and investigate the title of the vendor appearing on the face of the certificate. Court of 22 Appeals. He is charged with notice only of such burdens and claims as are annotated on the title. the lot. La Union. Private respondent cannot be faulted for believing this representation. considering that petitioners' claim was not noted in the certificate of the title covering Lot No. 1 . SO ORDERED. In Sandoval v. without any protestation or complaint from the petitioners. a party who has actual knowledge of facts and circumstances that would move a reasonably cautious man to make an inquiry will not be protected by the Torrens system. including the disputed portion. we held: It is settled doctrine that one who deals with property registered under the Torrens system need not go beyond the same. Costs against petitioners. all surnamed Viloria. Viloria as trustee. the Petition is hereby DENIED and the assailed Decision AFFIRMED. 1âwphi1. Balaoan. Clearly. were actually occupying the disputed lot. Balaoan. Viloria v. 5679. La Union. we must stress that the vendor. but only has to rely on the title. Nicolasa and Rosaida. Thus. Balaoan.Petitioners debunk Private Respondent Selma's title to the disputed property. had been the subject of several sales transactions. under TCT No. Branch 34.
who was in possession of the properties. La Union. . and ordered a partition of the properties such that the commercial lot and the orchard would be divided into four (4) equal parts each. Viloria.Sometime in December 1980 Nicolasa Viloria passed away. Ruperto alleged that Nicolasa and Rosaida sold the commercial lot to him by virtue of a deed of sale executed on 10 August 1965 and duly registered in the Office of the Register of Deeds of La Union. After Nicolasa and Rosaida died. interests and participation over the properties in question. the trial court declared Ruperto L. The heirs alleged that during the lifetime of Nicolasa and Rosaida they were co-owners in equal shares and pro-indiviso with Ruperto L. Viloria of a commercial lot and an orchard. Gerardo Viloria. private respondents also asserted that while Rosaida Viloria executed a deed of sale conveying her share of the orchard to Ruperto Viloria. On 6 April 1992 the trial court ruled that title over the commercial lot was not in reality transferred in the name of Ruperto L. Rodolfo V. Aquino and Manuel V. survived by their brothers Ruperto L. Nicolasa and Rosaida remained as co-owners of the commercial lot. the heirs of their sister Felicitacion V. Ancheta sold and relinguished to him all their claims and ownership over the commercial lot. Estrella V. against their co-heir Ruperto L. upon realization of the iniquitous nature of the document. Neither did the "Catulagan" allegedly executed by Nicolasa convey her share of the orchard to Ruperto since she had already disposed of the property in favor of Rodolfo Ancheta by 7 virtue of a deed of donation. their heirs demanded from Ruperto L. Anastacio L. it was without any consideration. Ancheta. referred to as "Catulagan. Viloria and the other heirs as co-owners of the entire portion of the commercial lot (except the northern portion titled in the name of Rodolfo. Viloria for the reason that the parties to the deed of sale merely intended to create an 3 express trust. 1/4 for 8 Ruperto Viloria and 3/4 for the other heirs. which upon their demise passed on to their heirs. Cacanando. Viloria. Ruperto further alleged that it came to his possession when Nicolasa sold to him her share of the land and the ancestral house standing thereon by virtue of a private agreement written in Ilocano. On 18 February 1991 the heirs of Rosaida and Nicolasa Viloria filed an action for partition with the Regional Trial Court of Balaoan. namely. Aurora and Estrella Ancheta) and the entire orchard. and the heirs of their other sister Josefina V. Both died single and without issue. to partition the same among them but he refused claiming that during their lifetime Nicolasa and Rosaida sold and conveyed to him all their shares. who likewise predeceased them. As proof of this arrangement. Cacanando." dated 10 June 1978. who predeceased them. while Rosaida sold to him her share of the property by virtue of a deed of sale dated 10 September 1987. while the heirs of Josefina V. By admitting the trust and assuring his sisters Nicolasa and Rosaida as well as private 4 respondents that they would remain as co-owners. Ancheta. Petitioner Ruperto Viloria thus became only a trustee to an express trust which incapacitated him from acquiring for 5 his own benefit the property committed to his custody although titled in his name. Lida C. As regards the orchard. an express trust had been created. The trial court likewise declared that there was no effective conveyance of the 1/3 share of Rosaida over the orchard in Nalasin since the document of conveyance was in effect nullified when Rosaida executed 6 the deed of revocation. and that Ruperto assured Nicolasa and Rosaida that they would remain as co-owners and the deed of sale returned to them. Through their co-heirs Lida C. Refuting Ruperto's allegations. Rosaida Viloria immediately executed a deed of revocation of the sale. followed by her sister Rosaida in June 1989. Nicolasura. Viloria. Aquino and Atty. Viloria. Consequently. However. namely. the heirs asserted that Nicolasa and Rosaida exercised acts of administration and dominion over the property and collected rentals from the buildings standing thereon for 25 years or until they died. the heirs of Nicolasa and Rosaida maintained that the transfer of title of the commercial lot in the name of Ruperto Viloria was only for loan purposes and not to convey and relinquish ownership over the property. Ancheta and Carmen A.
In the absence thereof. 1390 of New 14 Civil Code. These issues would call for the examination of the probative value of the evidence presented by the parties before the trial court. it would be premature to effect a partition of the properties. hence. only the 1/3 share of Rosaida Viloria in the orchard should be divided among petitioner and private respondents. As enunciated in Catapusan v. Petitioner further contends that the appellate court committed a grave error in law when it assumed jurisdiction over the validity of the 1965 deed of sale since it was never raised as an issue in Civil Case No.Apparently dissatisfied with the adjudication by the lower court. CA. . Hence. we find no reason to depart from this principle. The lower courts are in a much better position to properly evaluate the evidence and hence we find no other recourse but to leave it untouched and proceed with the determination of the other issues raised. according to petitioner. pursuant to Art. while petitioner denied their claim by asserting that their rights were supplanted by his by virtue of the deed of absolute sale. what should be divided into four (4) equal parts should only be the 2/3 share of Nicolasa and Rosaida Viloria. Neither can the existence of an express trust be inferred from the consent and conformity to the waiver of rights issued by Nicolasa and Rosaida since they were not signatories to the actual document. Petitioner now impugns the decision of the Court of Appeals as he contends that the appellate court committed serious errors when it affirmed the findings of the lower court that (a) the 1965 deed of sale of the commercial lot was an express trust and not a true conveyance of real property. petitioner points out that the 1965 deed of sale should have enjoyed the 15 presumption of validity since it was duly notarized. the trial court erred in ordering that the entire commercial lot be divided into four (4) equal parts since petitioner Ruperto Viloria already owned 1/3 as co-owner thereof. Viloria elevated the matter to the Court of Appeals which affirmed the findings of the court a quo with the modification that petitioner and private respondents should be declared co-owners of the commercial lot only to the extent of 2/3 of 9 the property and co-owners of 1/3 of the orchard. Therefore. Indeed. The contention is without merit. petitioner being 11 the sole signatory thereto. Petitioner argues that the existence of an express trust cannot be deduced from the collection of rentals by Nicolasa and Rosaida since what they collected were merely rentals for the use of the buildings and 10 improvements on the property as differentiated from rentals for the use of the land itself. The findings of fact by the lower court are conclusive absent any palpable error or arbitrariness. the issue of co-ownership and the legality of the 1965 sale have to be resolved in the partition 13 case. merely asked for partition without praying for the 12 annulment of the document. 417 where plaintiffs. As a result. In the action for partition private respondents claimed that they were co-owners of the property subject thereof hence entitled to their share. Petitioner still further asserts that the 1965 deed of sale should not have been declared as an express trust in the absence of a court declaration annulling and declaring it as such. the 1987 deed of sale remained valid. After carefully examining the records. and (b) that prescription did not run against private respondents. private respondents herein. Thus. Ruperto L. Likewise. As we have ruled in a litany of cases. until and unless the issue of ownership is definitely resolved. the appellate court did not exceed the limits of its jurisdiction when it ruled on the validity of the 1965 sale. public respondent overstepped the boundaries of its jurisdiction when it classified the 1965 sale as merely one of express trust and not a true conveyance. The appellate court further held that the deed of revocation executed by Rosaida did not rescind the 1987 deed of sale over the orchard since it was duly notarized and hence enjoyed the presumption of validity which could only be annulled through proper judicial action. resort to judicial review of the decisions of the Court of Appeals under Rule 45 is confined only to errors of law. with regard to the commercial lot.
CA where it was held that under the Torrens system registration is the operative act that gives validity to the transfer or creates a lien upon the land. to have any binding legal effect upon the 17 parties thereto. At no time did Ruperto openly repudiate the claims of his co-owners but continued to assure them of their . We disagree.Art. Although the notarization of the deed of sale vests in its favor the presumption of regularity. 1117. Prescriptive period for an action of reconveyance of real property based on implied or constructive trust which is counted from the date of registration of property applies when the plaintiff is 27 not in possession of the contested property. As regards prescription invoked by petitioner. Moreover. It has been held that a trustee who obtains a Torrens title over 20 property held in trust by him for another cannot repudiate the trust by relying on the registration. It is therefore the nature of the contract that is in issue and not the character of the consent given. hence. it does not validate nor make binding an instrument never intended. a separate declaration of nullity is no longer necessary since the trial court already assumed jurisdiction over the validity of the 1965 deed of sale in determining whether co-ownership in fact existed and whether partition was proper. an action to compel the trustee to convey property registered in his name for the benefit of the cestui que trust does not prescribe unless the trustee 28 repudiates the trust. The deed of sale being duly registered in the Office of the Register of Deeds of La Union in 1965 and a certificate of title issued in his name. or from 1965 up to the filing of the case 23 24 25 26 in 1991. Moreover. petitioner postulates that property transferred or conveyed by one person to another during the lifetime of the former no longer forms part of his estate at the time of his death to which his heirs may lay claim. 1127 and 1134 of the New Civil Code. Petitioner cannot rely on the registration of the land subject of the 1965 sale and the corresponding issuance of a certificate of title in his name as vesting ownership on him because the trial court found the deed of sale to be in fact an express trust. it continued to form part of their estate and devolved upon their demise on their heirs. it is contended that prescription has already run against co-owners Nicolasa and Rosaida Viloria since Ruperto Viloria openly. publicly and continuously owned and possessed the properties for a period of more than 25 years. Citing Locsin v. thereby conferring upon him valid and legal title to the property. Finally. However. Nicolasa and Rosaida were in possession of the land and were exercising acts of ownership and administration over the property consistent with their responsibility as co-owners. The parties in the instant case freely gave their consent to the 1965 deed of sale but intended it to be merely a trust agreement and not a relinquishment of rights. Petitioner argues that the determination of the preceding issue is contrary to the principle laid down 18 in Dino v. petitioner claims that the ruling that the heirs are entitled to the property in question is contrary 21 to the law on succession. with good and just title pursuant to Arts. The claim that the ruling of the appellate court is contrary to the law on succession and jurisprudence proceeds from the assumption that the deed of sale was a true conveyance. in the first place. cannot thereafter be declared as merely an 19 express trust. 22 CA. the Court finds that the 1965 deed of sale was in fact an express trust and hence no actual conveyance took place. The provision alludes to contracts which could be voided by reason of absence or infirmity of consent and not to simulated contracts. 1390 of the New Civil Code has no bearing in the instant case. The contention is without merit. The fact that a deed of sale is notarized does not necessarily justify the conclusion that the sale is a true 16 conveyance to which the parties thereto are irrevocably and undeniably bound. Since the shares of Nicolasa and Rosaida in the commercial lot were already sold to Ruperto Viloria by virtue of the 1965 deed of sale the heirs had nothing more to inherit. The owners Nicolasa and Rosaida did not relinquish their claim of ownership over the commercial lot but continued to exercise acts of administration and dominion over it.
no right was transferred to Jaime. Balaoan. as heirs of the late Felicitacion V. Lot 12 and Lot 19. Jaime and Salvador made a Kasunduan whereby Jaime transferred ownership of the 65 sq. 2007 CARPIO MORALES. considered them trustees of an implied trusts (2) Whether or not the prescriptive period to recover the property obtained by fraud is applicable in the case at bar HELD: (1) NO. as heirs of the late Josefina V. the lot was still owned by the Republic of the Philippines. Apolinario conveyed Lot 12 to his son Salvador. under TCT No. Hence. Lida C. On that same year. He filed for an application to purchase the said lot. 167320. this petition. The 65 sq. for which he and his wife were issued a title. who was awarded the lot in 1986 and no right was transferred by Salvador to the petitioners. The Land Tenure Administration later found that Lot 19 is still available for qualified applicants. in Lot 19 were already conveyed to Salvador. T-29060 in the name of Ruperto Viloria as trustee. Viloria. more than four years from the issuance of the title to the spouses Remoquillo. La Union. its cancellation is a matter between the grantor and the grantee. the decision of the Court of Appeals declaring petitioner and private respondents as coowners of the 2/3 portion of the commercial lot located in Cabua-an Oeste (Poblacion). is AFFIRMED. and Rodolfo V. ISSUE: (1) Whether or not the property was acquired by the spouses Remoquillo through fraud which by force of law. Also. the NHA (then LTA) awarded Lot 19 to Jaime. January 20. If the title was in fact fraudulently obtained. with the same area of 341 sq. No. Ancheta. Nicolasura. Jaime. 0-1952 in the name of Ruperto. assisted by her husband Ramon Nicolasura. Cacanando. the 65 sq. La Union. Hence. Aquino. Balaoan. . The trial court held that the petitioners were co-owners of the subject property and allowed for the action for specific performance. The title originated from a grant by the government. assisted by her husband Gregorio Aquino. and Manuel V. and 3/4 for private respondents Anastacio L. hence. shall be divided into 4 equal parts: 1/4 for petitioner. In 1972. which the LTA granted in 1971. Apolinario made a deed of assignment transferring possession of Lot 19 in favor of his grandson.1âwphi1. The petitioners filed for the annulment of the title on the ground of fraud because by the virtue of the Kasunduan. Apolinario Hermosilla (Apolinario) was occupying a lot in such homesite until his death in 1964. petitioners have no personality to impute fraud or misrepresentation against the State or violation of the law. being its occupant filed an application in 1963. The property was previously a public land.m. prescriptive period did not commence to run against private respondents. Hence. it having been filed in 1992. lot located in the San Pedro Tunasan Homesite.m. in Lot 19 in favor of Salvador. WHEREFORE. La Union. This Homesite was acquired by the Republic of the Philippines in 1931.R. The CA reversed the trial court’s decision. renderin g the Kasunduan void because at the time of its execution (1972). Ancheta. the CA held that the action had prescribed. and 1/3 portion of the orchard located in Nalasin. Estrella V.: FACTS: The subject property is a 65 sq. Jaime Remoquillo. all surnamed Viloria. Balaoan.m. He caused the subdivision of the lots into two.nêt Heirs of Salvador Hermosilla vs. In 1986.m. J. Nicolasa and Rosaida. In 1962. Ancheta and Carmen A. under OCT No. m. Spouses Remoquillo G. subject of this controversy forms part of Lot 19.rights regarding the property. Cacanando. it is the State which should file the suit to recover the property through the Office of the Solicitor General. The properties in Cabua-an Oeste and Nalasin.
FACTS:The subject property is an unregistered land with an area of 4. Since there was no actual need to reconvey the property as petitioners remained in possession thereof. if the plaintiff is not in possession. which accounts for the tax declaration being in Crispulo’s name. The prescriptive period for the reconveyance of fraudulently registered real property is 10 years. SOLEDAD CAÑEZO vs. CONCEPCION ROJAS G. Respondent asserted that it was her husband who bought the property from Limpiado. . however. petitioner Soledad Cañezo alleged that she bought such parcel of land in 1939 from Crisogono Limpiado. It is undisputed that petitioners’ houses occupy the questioned property and that respondents have not been in possession thereof. In a complaint on 1997. although the sale was not reduced into writing. this petition for review. From the body of the complaint. No. Crispulo Rojas. Petitioners failed to discharge this burden. acting on petitioner’s motion for reconsideration. Biliran. or in some manner injure him must be specifically alleged and proved by the petitioners by clear and convincing evidence. the RTC amended its origina l decision and held that the action had not yet prescribed considering that the petitioner merely entrusted the property to her father. who took possession of. she immediately took possession of the property. it having been filed to enforce an alleged implied trust after Jaime refused to segregate title over Lot 19. She also discovered that the tax declaration over the property was already in the name of his father. and cultivated the property. Hence. Fraud is never presumed. Biliran.One who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. The ten-year prescriptive period for the recovery of a property held in trust would commence to run only from the time the trustee repudiates the trust. The RTC found no evidence on record showing that Crispulo Rojas ever ousted the petitioner from the property. Respondent appealed to the RTC of Naval. However. for an action for reconveyance based on fraud to prosper. her stepmother. J. petitioners seek the reconveyance of the property based on implied trust. Intentional acts to deceive and deprive another of his right. The CA held that. which reversed the MTC decision on the ground that the action had already prescribed and acquisitive prescription had set in. which reversed the amended decision of the RTC. 2007 NACHURA. was in possession of the property and was cultivating the same. she found out that the respondent. Thereafter. she and her husband left for Mindanao and entrusted the said land to her father. assuming that there was a trust between the petitioner and her father over the property.169 square meters situated at Naval. After the hearing. but imprescriptible if he is in possession of the property. In 1948. November 23. Concepcion Rojas. MTC rendered a decision in favor of the petitioner. From the allegations of the Complaint. Petitioner filed a petition for review with the CA.At all events. making her the real and lawful owner of the land. reckoned from the date of the issuance of the certificate of title. In 1980. 148788. (2) NO. the petitioners must prove by clear and convincing evidence not only his title to the property but also the fact of fraud. this type of action denotes imprescriptibility. her right of action to recover the same would still be barred by prescription since 49 years had already lapsed since Crispulo adversely possessed the contested property in 1948. the action took the nature of a suit for quieting of title.R.
As a rule. 6416 and another lot. (2) a trustee. In the case at bench. No. who is the person expressly designated to carry out the trust. Fourteen years later. A trust is the legal relationship between one person having an equitable ownership of property and another person owning the legal title to such property. Accordingly. are deducible from the nature of the transaction as matters of intent or. 1967. a son of Romana. . petitioner Eulogio M. The presence of the following elements must be proved: (1) a trustor or settlor who executes the instrument creating the trust. alleged that he had bought the land himself for PhP 30. (3) the trust res. Isidro Hynson who sold it on March 15. ripened into ownership. a clear intention to create a trust must be shown. G. we c an only conclude that Crispulo’s uninterrupted possession of the subject property for 49 years.000 from Romana. is inadequate to establish the existence of a trust because profit-sharing per se. or beneficiaries whose identity must be clear. the only evidence to support the claim that an express trust existed between the petitioner and her father was the self-serving testimony of the petitioner. or will. the burden of proving the existence of a trust is on the party asserting its existence. does not necessarily translate to a trust relation. 1982 as shown in the Deed of Sale dated December 22. The existence of express trusts concerning real property may not be established by parol evidence. payable on or before December 31. or by words evincing an intention to create a trust. Lot No. Petition denied. Rec. consisting of duly identified and definite real properties. were yet untitled. 1981. without being expressed. the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. such as payment of real estate taxes. in the absence of a trust relation.02. coupled with the performance of acts of ownership. these became subject of Cadastral Case No. Although no particular words are required for the creation of an express trust. It must be proven by some writing or deed. And petitioner sadly failed to discharge that burden. In this case. an intention to create a trust cannot be inferred from the petitioner’s testimony and the attendant facts and circumstances. Trusts are either express or implied. 1965 to Romana Monteal Pedrano. LRC Cad. for titling. The petitioner testified only to the effect that her agreement with her father was that she will be given a share in the produce of the property. it was incumbent upon petitioner to prove the existence of the trust relationship. for PhP 315.ISSUE:Whether or not there is an existence of trust over the property – express or implied between the petitioner and her father HELD:NONE. as being superinduced on the transaction by operation of law basically by reason of equity. Since Lot No. N-64. Thus. Implied trusts are those which. of the particular intention of the parties. Pedrano. independently. 6416 was previously owned by Dr. Decision of the CA affirmed. and (4) thecestui que trust. 6409. 159666 PEDRANO VS PEDRANO Facts: Lot No.R. Express trusts are those which are created by the direct and positive acts of the parties. Romana was married to Benedicto Pedrano who passed away on August 19. N-4. by some writing or deed. NO. This allegation. and the proof of fiduciary relationship must be clear and convincing. standing alone as it does. The creation of an express trust must be manifested with reasonable certainty and cannot be inferred from loose and vague declarations or from ambiguous circumstances susceptible of other interpretations. and such proof must be clear and satisfactorily show the existence of the trust and its elements. In light of the disquisitions. we hold that there was no express trust or resulting trust established between the petitioner and her father.
prescription had set in. 18-1481. Romana allowed petitioner to occupy the house on Lot No. the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title of the property. the complaint in the above-entitled case is ordered dismissed. Thus. The Bureau of Lands approved the survey on 2 July 1959 resulting in the issuance of Survey Plan Psu-173083 covering both 7 lots. Upon receipt of the approved survey plan. the sale would become absolute. prescribes in 10 years. 1981. 1144 of the Civil Code was erroneously applied by the RTC. 6416 until the December 31.000 consideration for Lot No. CV No. which he had previously purchased from one Leopoldo Carloto. and that Art. the date from whence the prescriptive period could be reckoned is unknown and it could not be determined if indeed the period had already lapsed or not. 1456 of the Civil Code was the applicable law.R. respondents averred they were unaware that petitioner instituted a cadastral case to have the land titled to himself. 6416. Hynson’s name in the title replaced with her name. The Trial Court ruled that prescription of the cause of action to annul the questioned Deed of Absolute Sale has already set in. 9 No. Thus. 1996. The CA reversed the ruling of RTC and stated that Art. APAO This is a petition for review to set aside the Decision dated 30 July 1999 and the Resolution dated 5 April 2000 of the Court of Appeals in CA-G. Romana informed petitioner that the former was canceling the sale and petitioner should have Dr. with prayer for a writ of preliminary injunction and restraining order and damages. The vendors executed a deed of sale which stated inter alia that they could purchase back the property within six months for P400. as we have already explained in this case. Fernando had the property surveyed by Engr. Ernesto Nuval together with the piece of land adjacent to it. 2737. 6416. The Facts On 21 March 1955. Branch 18 ("trial court") in Civil Case No.Alleging that petitioner had not paid the PhP 30. and the instant action was filed only on September 5. 1981 Deed of Sale voided for want of consideration and for fraud. Fernando Apao ("Fernando") purchased from spouses Alejandro and Teofila Magbanua ("vendors") a parcel of land with an area of 61. after more than 14 years. it concluded that since the deed of sale was executed on December 22. however. The CA explained that the instant case involves an implied trust. and the recovery of the possession and ownership of Lot No. The Court of Appeals affirmed the 4 Decision dated 25 August 1995 of the Regional Trial Court of Pagadian City. 52803. respondents filed a case asking for the annulment of the December 22. as stipulated in the December 22. Fernando thus 6 took possession of the same. Issue: W/O prescription had set in. His application was docketed as F. Mendizabel v. Fernando bought the property for P400. Hence. we agree with the CA that prescription has not yet set in.P. Zamboanga del Sur. Fernando immediately filed an application with the 8 Bureau of Lands for a free patent over the entirety of Psu-173083. where no OCT has yet been issued despite an order from the court to title the lots. respondents instituted the instant case to have the December 22. Further. The RTC said that it could no longer annul the sale reasoning that Article 1144 of the Civil Code provided for 10 years within which to bring action from the time the right of action accrues upon a written contract. Respondents added that despite the cancellation of the deed of sale. 1981 Deed of Sale. They discovered his machinations only in 1994. 5 1 2 3 . According to respondents. On 1 April 1958. 1981 Deed of Sale. 1982 deadline. failing which.616 square meters ("property") situated in Malangas. Held: An action for the reconveyance of a parcel of land based on implied or constructive trust.A. The vendors failed to repurchase the property.
823 in the name of Ignacio. P-29. Fernando and his wife Teopista Paridela-Apao ("respondents") filed before the trial 18 court a complaint for Annulment of Titles. which has been raised on appeal to the Office of [the] President. such administrative decision/order and/or resolution. The Register of Deeds issued the 16 certificates of title on 14 December 1982. on the EAST by the National Highway." Respondents asserted that – x x x Assuming. the Survey Party of the Bureau of Lands surveyed the same area. on the SOUTH by the lot of the herein plaintiffs. could have been based and predicated upon the resolution of the aforesaid land conflict by and between herein plaintiffs and defendant.A. containing an area of sixty-one thousand six hundred-sixteen (61. Fernando talked to Nestor and Ignacio. Bounded on the NORTH by the lot of Ricardo Conwi. 1080 was already titled separately as Lot No. 1080. 407 and 14 Homestead Application No. P-29. the Bureau of Lands Regional Office in Zamboanga City rendered a decision awarding 12 Lot No. Zamboanga del Sur. did not since then ripen into or attain its 17 13 . Nestor Mendizabel. 1080 to Ignacio. Malangas. the Secretary of Agriculture and Natural Resources modified the decision of the Bureau of Lands. 18-8905 (E-18-8521). the decision of the Director of Lands dated May 11. docketed as H. The free patent application No. Fernando found out from the Office of the Register of Deeds of Pagadian City that Lot No. Barely 10 days after he filed his appeal. 18-8905 of Ignacio Mendizabel for Lot No. On 6 August 1987. Fernando learned that Ignacio Mendizabel ("Ignacio") had filed prior to the Bureau of Lands’ survey a homestead application over Lot No. Fernando became the claimant-protestant 11 in Ignacio’s application. and on the WEST by the lot of Leonardo Aban. bananas and about one hundred (100) punos of coconut fruit bearing trees and with four (4) residential houses occupied by produce-sharing tenants and with all other existing improvements thereon. that the issuance thereof.After the survey of Fernando’s land.616) 19 sq. Reconveyance and Damages against spouses Nestor and Elizabeth Mendizabel and spouses Ignacio Mendizabel and Adelina Villamor ("petitioners"). The dispositive portion of the decision of the Secretary of Agriculture and Natural Resources reads: Wherefore. Respondents alleged in their complaint that they were the "true and actual possessors" of a parcel of agricultural land more particularly described as follows: Certain parcel of land actually devoted to corn and rice cultivation. Respondents also alleged that petitioners secured the titles to the property "fraudulently. Fernando learned that Lot No. 1080-A covered by Original Certificate of Title No. 18-1481 of Fernando Apao shall be given due course for Lot No. nonetheless. located at Kilometer 4. Barangay Mabini. 1962. On 11 May 1962. On appeal.. if any there be. 1080-B covered by Original Certificate of Title No. 1080. Dissatisfied with the decision of the Secretary of Agriculture and Natural Resources. No. should be. arguendo. more or less. root crops. and Lot No. pleading with them to reconvey the property to him. This latter survey resulted in a subdivision of the land into two separate and distinct lots identified as Lot 10 Nos. Fernando did not receive any notice of the decision on his appeal. Fernando appealed 15 to the Office of the President. 407 and 1080. as hereby it is set aside.m. 1080 had been partitioned between Ignacio and his son Nestor Mendizabel ("Nestor"). Nestor and Ignacio rejected Fernando’s request.822 in the name of Nestor.
for the basic and fundamental reason that plaintiffs who. petitioners alleged that the present case was filed merely to harass them because respondents knew that the Bureau of Lands. the INP Station Commander of the Buug Police Force in Pagadian City and who was petitioners’ administrator of the property. and the Office of the President had already adjudged petitioners the owners of the property. Respondents alleged that on 21 March 1988. 25 21 On 16 May 1988. The trial court denied respondents’ Motion to Declare Ignacio and Wife in Default in its Order dated 15 27 June 1988.822 covering Lot No. 28 . mandatory restraining writ" ordering petitioners to desist and refrain from disturbing the peaceful enjoyment and possession of respondents of the property during the pendency of the proceedings. In their Amended Answer. Petitioners also asserted that the issuance of Original Certificate of Title No.823 covering Lot No." As counterclaim. prohibitory. Respondents further asserted that Ignacio and his wife Adelina should be declared in default considering that from the time petitioners were served with summons and copies of the complaint on 21 October 1987. estoppel and laches. Petitioners sought the dismissal of the complaint and asked for damages. respondents filed an Opposition to Defendants’ Motion for Leave to Amend Answer and 26 Motion to Declare Co-Defendants Ignacio Mendizabel and Wife in Default. through Lorenzo 23 Brañanula ("Brañanula"). respondents’ tenant for 25 years. As affirmative defenses. identified as Lot No. The trial court allowed petitioners’ Amended Answer. On 29 April 1988. surreptitiously harvested coconuts from the coconut trees on the property. 1080-B in the name of Ignacio was based on a homestead patent granted by then President Ferdinand Marcos on 6 April 1971. Respondents asked the trial court to issue "an injunctive. whose wife Adelina Villamor ("Adelina") had since died. Secretary of Agriculture and Natural Resources. he told them that Oscar Guevarra. directed him to harvest the coconuts. Respondents claimed that when they confronted Brañanula. Respondents claimed that petitioners’ Amended Answer had substantially altered petitioners’ defenses. P-29. has [sic] not been furnished with a copy thereof. and Original Certificate of Title No. respondents filed their Answer to Counterclaims and Petition for Issuance of an 22 Ancillary Restraining Writ. petitioners filed a Motion for Leave to Amend Answer. 1080-A in the name of Nestor. 1080. petitioners. are directly affected 20 thereby.finality and enforceability. the trial court issued an Order granting respondents’ petition for issuance of a 24 restraining order. Respondents asserted that allowance of petitioners’ Amended Answer would only cause undue delay in deciding the present case. On 25 March 1988. from Alejandro Magbanua on 24 May 1955. and the indefeasibility and incontrovertibility of their titles. In their answer. petitioners claimed that Ignacio. On 30 March 1988. only Nestor had filed his Answer. petitioners included the defenses of prescription. Petitioners claimed that Ignacio took possession of the property and introduced improvements on it. lest respondents suffer more damages. petitioners claimed that respondents had no cause of action against them as respondents had no personality to institute the present case "seeking the nullity of a patent issued by order of the President of the Philippines. purchased the property. P-29.
Respondents asserted that despite the restraining order issued by the trial court. let the continuation of trial of the above-entitled case be set again on October 18. On the other hand. Finding the manifestation of counsel for the plaintiffs to be proper and in order. As borne out by the record of the instant case. petitioners. at 8:30 in the morning. with the warning that should defendants fail to present their evidence in the next hearing. counsel for the defendants had requested that this case be reset to another date. On 25 October 1994. Respondents also offered documentary evidence consisting of a Sketch Plan and the blue print of the approved subdivision plan of respondents’ land identified as Psu-173083. In its Order dated 28 November 1989. both of whom were residents of Malangas. Counsel for the plaintiffs manifested that he is not interposing to the postponement of this case today but requested that this will be the last postponement with the warning that should the defendants fail to present any evidence in the next hearing of this case. and Oscar Guevarra. 1994. petitioners filed a Notice of Death stating that Adelina died on 8 April 1983. the 36 trial court issued an Order stating that the case was deemed submitted for decision. Brañanula. Respondents presented three witnesses: Brañanula. On 13 January 1989. as of March 24. Justiniano Lizardo ("Lizardo"). respondents would continue to suffer irreparable damages. the trial court set aside the order. harvested palay. defendants per Court’s Order were considered to have waived their right to present their evidences for failure to appear on the hearing set . the case is deemed submitted for decision. WHEREFORE. the case shall be deemed submitted for decision. Thus. the same is hereby granted. and Fernando himself. Zamboanga del Sur. Petitioners filed a 37 motion for reconsideration of the order. the trial court issued an Order citing petitioners and their hired hands in contempt of 30 31 court. petitioners repeatedly failed to present evidence at the scheduled hearings. Upon petitioners’ Motion for Reconsideration. the trial court issued the following Order: When the above-entitled case was called for continuation of trial today. Respondents asserted that unless petitioners and their agents are enjoined from disturbing respondents’ peaceful possession of the property. The trial court stated that Adelina’s children would substitute her in the proceedings. On 9 November 1989. Francisco Briones. On the other hand. respondents filed an Urgent Motion to Declare Defendants and Hired Hands in 29 Contempt of Court. 35 34 32 Petitioners’ counsel failed to present evidence at the scheduled hearing of 18 October 1994. and coconuts from the property in October 1988 and on 2 December 1988.On 12 January 1989. the trial court directed petitioners to submit the names of Adelina’s children. the trial court issued the following Order: Acting on the Motion for Reconsideration filed by counsel for the defendants. through their hired hands. 1992. the court resolves to DENY the same. corn. SO ORDERED. The 33 Notice stated that Adelina was survived by her six children. counsel for the plaintiffs appeared and manifested that he is ready for today’s continuation of hearing. namely. On 13 September 1994.
Despite the indulgence of the Court. Upon Motion by counsel for the defendants. P-29. Pronouncing exemplary and incidental damages against defendants. WHEREFORE. defendants choose to delay the proceedings of this case thus.823 for Lot No. still defendants failed to present their evidences. 1994. the trial court rendered judgment. in favor of plaintiffs to include cost of suit and attorney’s fees in the amount of seventy five ( P75. However. 41 The trial court explained its decision in this wise: From the documents presented and from the oral testimonies given by the witnesses.00) pesos. Declaring Original Certificate of Title No. respectively their rights as NULL AND VOID AB INITIO and held said property as trustees for the benefit of plaintiffs. Ordering the Register of Deeds of Pagadian City to require defendants Nestor Mendizabel and Ignacio Mendizabel to surrender the above named titles immediately. thus the Court considered the case submitted for decision. petitioners filed a Motion to Offer Documentary Exhibits with Prayer to Submit 39 40 Memorandum. SO ORDERED. Ordering the Provincial Sheriff through the Clerk of Court. in view of the foregoing and premises considered. 1080-B issued in the name of Nestor Mendizabel and Ignacio Mendizabel. Regional Trial Court. considering that this case has logged for a long time already. after they were issued the . Pagadian City. the case will be deemed submitted for decision. judgment is hereby rendered:1avvphil. Stenographers who took the proceedings of this case are hereby ordered to submit their transcripts of their stenographic notes within 15 days from the date of this order. the defendants were warned that should they fail to present their evidences in the next hearing. 38 On 28 October 1994. and d. 1080-A and Original Certificate of Title No. P-29.822 for Lot No. on October 18. The trial court granted the motion in its Order dated 3 November 1994. Philippine Currency. the dispositive portion of which reads: WHEREFORE.net a.000. b. SO ORDERED. The Ruling of the Trial Court On 25 August 1995. c. In fact. to execute the necessary Deed of Reconveyance of the above-specified titles in favor of plaintiffs. said Order was set aside and defendants were allowed to present their evidences.on the said date. the instant Motion for Reconsideration is hereby DENIED and this case is deemed submitted for resolution. it is very clear that defendants never acquired actual possession of the land in question. in an Order dated September 13. 1994.
823 to defendants twenty seven (27) years after and entitling plaintiffs to have acquired the property by acquisitive prescription bearing in mind that defendants or their predecessors had never taken any legal steps or remedy to demolish plaintiffs[’] possession. on May 24. out of respect or goodwill with the landholders. meaning. they had to employ the services of an INP Station Commander in the person of Oscar Guevarra to be able to enjoy the harvest and fruits of the plants in the litigated area. The tenants who testified affirmed plaintiffs[’] claim of ownership. Ironically. unfortunately. P-29. How plaintiff failed to secure title over the land in question is explained by the fact that some other persons were applying for it. because the "free patent" application of Fernando Apao was given due course for Lot No. the DENR. This Court would like to believe defendants as the true and lawful owners of Lot No. the Decision of the Secretary of Agriculture which was accordingly affirmed in toto by the [O]ffice of the President placed defendants in an awkward situation. Alejandro Magbanua from whom defendants acquired said property has been in possession of the subject property. 407 and the "homestead" application of Ignacio Mendizabel was similarly given due course for Lot No. It is clear. but not one of them ventured. If it was the other way around. as pointed out in their answer.822 and Original Certificate No. that the battle or contest to secure the title was not waged in the venue itself. plaintiffs were the ones in actual possession and enjoying the fruits thereof who were disturbed only by the issuance of Original Certificate of Title No. at the time they applied for homestead title. that would have saved defendants from an awkward situation. while one party applying for title over the land was in actual possession. namely. "Homestead" presupposes actual occupation and possession of the land and enjoyment of its fruits. P-29. which was subdivided and apportioned among father and son as Lot Nos. The documentary evidences and the oral testimonies have conjured a very clear picture sufficient to convince this Court that the original certificate of titles issued in the name of defendants Ignacio . Although it is true that the Deed of Sale in Cebuano (Exhibit "A" for plaintiff) remains a private document being devoid of notarial registration. it stands as plain proof of plaintiffs prior acquisition and right of possession which defendants have not demolished. 1955. Under the land reform law. perhaps. But ownership of real property is better recognized by actual possession thereof and not by mere possession of documents relative thereto. either constructive in the form of a Tax Declaration or other monuments of title or physically. the Secretary of Agriculture and the [O]ffice of the President were made to believe that defendants. except by their having secured titles thereon. 1080. but. Besides there is no showing that the alleged vendor.titles. Nowhere in the records of this case was there any evidence to show from whom defendants acquired and how they acquired the land they succeeded to have titles to. they have all the right to have the land they are tenanting acquired by opting to avail of the benefits provided by law. were in actual possession of and occupying the land in question. when the contrary was true. as shown by the fact that defendant Nestor Mendizabel was working with the Bureau of Lands as a skilled employee. however. because of the titles they have thereon. 1080-A and 1080-B. 1080. except the allegation that they bought the property from Alejandro Magbanua. the other parties applying for title over the same area was in a better position to facilitate the documents. There is also no showing that defendants acted to eject plaintiff if the latter forcibly entered and took possession of the land. It is obvious that the authorities.
822 and Original Certificate of Title No. prescinding from the foregoing disquisitions. moreover. and stratagem to the disadvantage of plaintiffs. The Court of Appeals held that the evidence presented by respondents "tend to disprove the factual findings of the administrative bodies. The Court of Appeals’ Ruling On 30 July 1999.Mendizabel and Nestor Mendizabel. in favor of plaintiffs to include cost of suit and attorney’s fees in the amount of seventy five thousand ( P75. issued in the above-entitled case particularly in the dispositive portion of page 8.000. SO ORDERED.00) pesos.823. the Court of Appeals ruled that the possessor has a better right. Costs against defendants-appellants. which. the same holds true only if the findings are supported by substantial evidence. if considered. paragraph d of said decision which should read as follows: d. 44 The Court of Appeals held that there is no cogent reason for it to deviate from the rule that factual findings of the trial court shall not be disturbed on appeal unless the trial court has overlooked or ignored some fact or circumstance of sufficient weight or significance. the Court of Appeals rendered judgment as follows: WHEREFORE. the trial court issued the following Order: The Court in the exercise of its inherent power hereby corrects its Decision dated August 25. Pronouncing exemplary and incidental damages against defendants. P-29. 1 080. respondents were undisturbed in their possession of the property. Since prior to that time. could have been obtained through fraud. The Court of Appeals noted that the only instance when petitioners "voiced out" their title to the property was in 1988 when Oscar Guevarra vehemently told respondents’ tenants to vacate Lot No. namely Original Certificate of Title No. The Court of Appeals. P-29. would alter the situation. (Emphasis supplied) On 25 October 1995. The Court of Appeals held that petitioners’ failure to prove that respondents received the decision or that petitioners enforced the decision against respondents was fatal to petitioners’ defense. the decision appealed from is hereby AFFIRMED in toto. Accordingly. SO ORDERED. 43 Petitioners appealed to the Court of Appeals. Philippine Currency. 1995. under these circumstances an implied trust is created by 42 operation of law for the benefit of the plaintiffs. held that reliance by petitioners on the fact that respondents never appealed the 1971 decision of the Office of the President could not be given credence because the decision was not properly identified. ." The Court of Appeals further held that respondents have adequately proven by the testimonies of their witnesses that Fernando actually possessed and cultivated the property at the time of the homestead application and was then enjoying its fruits. The Court of Appeals held that while factual findings of administrative agencies must be respected. manipulation.
Rule 8 of the Rules of . 4. 47 46 The Ruling of the Court The petition must fail." it did not state with particularity the circumstances constituting fraud or mistake. pursuant to Section 5. Whether the Court of Appeals erred in not giving weight to the factual findings of the Department of Agriculture and Natural Resources. The Court of Appeals held that while it is doctrinal that a decree of registration is no longer open to review or attack after the lapse of one year. Action for Reconveyance Based on Implied Trust Petitioners claim that while respondents’ complaint alleged "fraud or mistake. The Issues Petitioners raise the following issues: 1. 2. does not prescribe. which in effect seeks to quiet title to the property. An action for reconveyance is still available to the aggrieved party if the property has not passed to an innocent purchaser for value. The Court of Appeals held that an action for reconveyance based on implied trust prescribes in 10 years only if the 45 claimant is not in actual possession. the law creates what is called a "constructive or implied trust" in favor of the defrauded party and grants the latter the right to recover the property fraudulently registered. this petition. The Court of Appeals held that considering that respondents are in possession of the property in the concept of an owner. Whether respondents have acquired ownership of the lands covered by the homestead titles granted to petitioners. when a person through fraud succeeds in registering a property in his name. 5. The Court of Appeals stated that under Article 1456. 3. The Court of Appeals held that in the present case prescription has not set in. Hence. The Court of Appeals also ruled that the action for reconveyance that respondents availed of in the present case is proper. the action for reconveyance. Whether implied trust exists in this case.The Court of Appeals also ruled that the doctrine of implied trust as enunciated in Article 1456 of the Civil Code operates in favor of Respondents. Whether the petition lacks cause of action considering that the alleged circumstances constituting fraud or mistake were not stated with particularity in the complaint. The Court of Appeals denied petitioners’ motion for reconsideration in its Resolution dated 5 April 2000. it does not necessarily mean that the aggrieved party is without remedy at law. Whether the action for reconveyance has already prescribed. although its issuance is attended with fraud.
1456. Petitioners’ argument is untenable. and (4) they were fraudulently deprived of ownership of the property 50 when petitioners obtained homestead patents and certificates of title in their names. x x x . The Civil Code provides: ART. A constructive trust. respondents clearly asserted that: (1) they were the "true and actual possessors" of the property. the Court in Aznar Brothers Realty Company v. would entitle the plaintiff to recover title to the disputed land. Petitioners would nonetheless insist that respondents failed to present any proof of fiduciary relation between them and respondents and "breach of such trust by petitioners. (1) that the 48 plaintiff was the owner of the land or possessed the land in the concept of owner. namely. respecting property which is held by the trustee for the benefit of the cestui que trust. if the registration of the land is fraudulent. a beneficiary and a trustee are linked by confidential or fiduciary relations. does not emanate from. are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by operation of law as matters of equity. These allegations certainly measure up to the requisite statement of facts to constitute an action for reconveyance based on an implied trust. (2) they purchased the property from spouses Alejandro and Teofila Magbanua on 21 March 1955 as evidenced by a deed of sale pacto de retro which spouses Magbanua executed in their favor. the person in whose name the land is registered holds it as a mere trustee. In an action for reconveyance. by force of law. obtaining patents and original certificates of title in their names. considered a trustee of an implied trust for the benefit of the person from whom the property comes. Aying stated: A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a typical trust. or generate a fiduciary relation. Indubitably. Construing the 53 provision of Article 1456." Whether there is fiduciary relation between petitioners and respondents is of no moment. In turn. both the trial court and the Court of Appeals should have decided the case in their favor. admitting them to be true. and the real owner is entitled to file an action for reconveyance of 52 the property. the person obtaining it is. the act of petitioners in misrepresenting that they were in actual possession and occupation 51 of the property. independently of the particular intention of the parties. Petitioners claim that on this score alone. unlike an express trust. While in an express trust. and (2) that the 49 defendant had illegally dispossessed him of the land. confidence is reposed in one person who is named a trustee for the benefit of another who is called the cestui que trust. In other words. without being expressed. created an implied trust in favor of the actual possessors of the property.Court. in a constructive trust. all that must be alleged in the complaint are two facts which. In their complaint. If property is acquired through mistake or fraud. xxxx … implied trusts are those which. there is neither a promise nor any fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends holding the property for the beneficiary. (3) their ownership of the property became absolute when the vendors failed to repurchase it within the period stipulated in their contract. implied trusts are either resulting or constructive trusts.
What is sought is the transfer of the property. In a number of cases. They arise contrary to intention against one who. in this case its title. we hold that respondents have a better right to the property since they had long been in possession of the property in the concept of owners. open. the due execution and genuineness of which are not denied under oath by the defendant. there was no denial under oath of the due execution and genuineness of the deed of sale. Moreover. Petitioners. In fact. by fraud. All documents attached to a complaint. Navo II. the Court has ordered reconveyance of property to the true owner or to one with a better right. assert that the deed of sale. An action for reconveyance of registered land based on ." should not be given weight for it was not 57 offered in evidence. and continuous possession of the property at the time he filed his application for a free patent and was then enjoying its fruits. Considering the circumstances in the present case. in equity and 54 good conscience. These facts were corroborated by the testimonies of Brañanula and 56 Lizardo. (Emphasis supplied) The records show that respondents bought the property from spouses Alejandro and Teofila Magbanua 55 on 21 March 1955 as evidenced by a deed of sale. the Torrens system was not designed to shield and protect one who had 65 committed fraud or misrepresentation and thus holds title in bad faith. which has been wrongfully or erroneously registered in another person’s name. Petitioners’ assertion has no merit. residents of Barangay Mabini. even if they are already the registered owners under the Torrens system. for the proper resolution of the case. obtains or holds the legal right to property which he ought not. that petitioners tried to occupy the 62 property by attempting to eject respondents’ tenants.x x x constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. Malangas. where the property had been erroneously or fraudulently titled in another person’s 63 64 name. The court. It is of no moment that respondents filed this action for reconveyance more than four years after the property was registered in favor of petitioners. to hold. however. In Bustarga v. This has the effect of relieving respondents from the duty of expressly presenting such document as evidence. petitioners never exercised any right of ownership over the land. must be considered as part of the 58 complaint without need of introducing evidence. In petitioners’ answer. petitioners. Thus. peaceful. Zamboanga del Sur. the Court held that "reconveyance is just and proper in order to terminate the intolerable anomaly that the patentees should have a Torrens title for the land which they and their predecessors never possessed and which has been possessed by [another person] in the concept of owner. Despite the irrevocability of the Torrens titles issued in their names. may still be compelled under the law to reconvey the property to Respondents. petitioners still failed to prove that 61 they were the owners of the property or that they had been in possession of the same. it was only on 21 March 1988. petitioners were never in possession of the property. Prescriptive Period of an Action for Reconveyance The essence of an action for reconveyance is that the free patent and certificate of title are respected as incontrovertible. it is also deemed admitted by petitioners. Fernando testified that he was in actual. therefore. or after respondents had filed their complaint. Hence. In contrast. may and should consider without the introduction of evidence the facts admitted 60 by the parties. the deed of sale is not only incorporated 59 into respondents’ complaint. duress or abuse of confidence. to its rightful owner or to one with a 66 better right." After all. "although Annex A of respondents’ complaint. despite the opportunities given them by the trial court.
which right can be claimed only 69 by one who is in possession. De La Cruz v. CV No. signed. CV No.R.: This is a petition for review on certiorari of the June 17. Even after its promulgation. a decision does not bind the parties until notice of the decision is duly served on them by any of the modes 74 prescribed by law. We have carefully reviewed the records and found that petitioners have not sufficiently proved that the findings of fact of the Court of Appeals are totally devoid of support in the records. promulgated. whether final or interlocutory. If a person claiming to be its owner is in actual possession of the property. while herein private respondents are the heirs of Maria de la Cruz y Guevarra. However. 52803. could hardly carry the day for them. CA ARAS. so long as such findings are supported by the 72 records or based on substantial evidence. there is no showing that respondents received a copy of the decision of the Office of the 73 President. The controversy involves a 1. Herein petitioners are the heirs (children) of the late Maria de la Cruz y Gutierrez. Factual findings of administrative agencies such as the Department of Agriculture and Natural Resources ("DANR") are accorded not only respect but also even finality if they are supported by substantial evidence. The Court has ruled that the 10-year prescriptive period applies only when the person enforcing the trust is not in possession of the property. we DISMISS the petition and AFFIRM the Decision of the Court of Appeals in CA-G. 2481. we hold that the findings of fact made by the Court of Appeals are conclusive and binding on this Court even if contrary to those of the DANR. In the present case. the right to seek reconveyance. respondents were in 68 possession of the property at the time they filed their complaint in the present case. No judgment or order. which in effect seeks to quiet title to the property. Wherefore. 70 . married to Mateo del Rosario Lansang. Besides. 1986 resolution of the same court denying the motion for reconsideration. SO ORDERED. married to Calixto Dimalanta.R. and Fermin de la Cruz. J. has juridical existence unless it is set down in writing. Factual Findings of Administrative Agencies The decision of the Office of the President affirming the decision of the Secretary of Agriculture and Natural Resources in DANR Case No. The reason is that the one who is in actual possession of the land claiming to be its owner may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. the factual findings of the Court of Appeals are at variance with those of the DANR. the point of reference being the date of registration of the deed or 67 the date of the issuance of the certificate of title over the property. Besides.980 square meters portion of Lot 1488. or that they are so glaringly erroneous as to constitute serious abuse of discretion. does not prescribe. His undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title. 05785 reversing the appealed decision of the Regional Trial Court of Angeles City. 1986 decision * of the then Intermediate Appellate Court in AC-G. deviation from this rule must be made when the administrative agency 71 itself clearly misappreciated the facts.implied trust prescribes in 10 years. which petitioners offered in evidence. and released to the parties. and the November 12. WHEREFORE.
OCT No. and two years after the death of Maria de la Cruz y Guevarra who. That on March 17. Maria de la Cruz y Gutierrez filed her Answer over the cadastral lot in question. 1974. Branch IV. on March 17. a person named therein as Fermin de la Cruz y Gutierrez is stated to have an interest or participation on the said lot. a complaint for reconveyance. married to Calixto Dimalanta. 16684 was issued in their names. revealed to petitioners Daniel Lansang and Isidro Lansang that the lot of their mother Maria de la Cruz y Gutierrez had been included in her title). they asserted that petitioners have lost their cause of action by prescription. over the handwritten name "Maria de la Cruz y Gutierrez" is a thumbmark presumably affixed by her. in Cadastral Case No. 1974 (allegedly barely three months after discovery of the registration. Petitioners. During the pre-trial. 1926. Maria de la Cruz y Gutierrez filed an answer to the questioned lot. what appears therein is the name Maria de la Cruz. 18. Maria de la Cruz y Gutierrez resided in the questioned lot in the concept of an owner. pp. That by virtue of the Answer over Cadastral lot in question filed by Maria de la Cruz y Gutierrez on March 17. 1975. However. in the space provided in paragraph 8 to be filled up with the personal circumstances of claimant Maria de la Cruz y Gutierrez. 4. having inherited the same from their parents and the OCT No. 26 years old. Finally. 1488 in favor of Maria de la Cruz.From 1921 until her death in 1951. 16684 was issued covering the lot in question. she entrusted the administration of the said lot to her niece Maria de la Cruz y Guevarra. 2. Exhibit "2-B". intended for the personal circumstances of other person or persons who may have an interest on the said lot. Exhibit "2-C". In their answer (Rollo. single. Original Certificate of Title No. 1926. and in the space provided in paragraph 9. Under the circumstances. the parties stipulated the following facts: 1. When cadastral proceedings were held in Porac. 62-65). That Lot No. on October 1. Exhibit "2-A". Cesar V. appears. Single. before she died in 1974. and . 5. She declared the lot for tax purposes in her name. 1926. the trial court rendered a decision adjudicating Lot No. married to Calixto Dimalanta and Fermin de la Cruz. Accordingly. Moreover. private respondents claimed that the land in questi•n is their exclusive property. filed with the then Court of First Instance of Pampanga. 1488 is the lot in question as stated in Paragraph 3 of the Complaint. Later. 2148. it is claimed that Maria de la Cruz married to Calixto Dimalanta and Fermin de la Cruz hold the property in trust for the petitioners. 1926. 18 was Maria de la Cruz y Gutierrez and not Maria de la Cruz y Guevarra who by not using her maternal surname "Guevarra" succeeded in registering Lot 1488 in her name and that of her brother Fermin de la Cruz. The main thrust of the complaint is that the claimant of Lot 1488 in Cadastral Case No. 3. instead of Maria de la Cruz y Gutierrez. That the maternal surname of Maria de la Cruz and Fermin de la Cruz is Guevarra and not Gutierrez. In the said filed answer. That Maria de la Cruz y Gutierrez affixed her thumbmark in the Answer dated March 17. 16684 of the Register of Deeds of Pampanga was issued in their names. Alejandria. the name Fermin de la Cruz. claiming to have learned of the same only on July 1. The same was amended on June 16. presided over by Hon. docketed therein as Civil Case No. that in paragraph 7.
46. by executing a deed of reconveyance and registering the same with the said Office at their own expense. Whether or not Lot 1488. married to Calixto Dimalanta. reads: WHEREFORE. pp. 16684 of the Register of Deeds of Pampanga. (d) ordering the plaintiffs and the defendants to pay the corresponding estate and inheritance taxes if the parcels of land inherited by them are subject to the payment of the same. (a) ordering the above-named defendants to reconvey to the plaintiffs a portion of 1. The decretal portion of the said decision. 3-4. one for the plaintiffs and the other for the defendants can be issued by the Register of Deeds of Pampanga in their favor and one-half of the expenses therefore to be shouldered by the plaintiffs.6. 2.980 square meters of Lot No. and the other half by the defendant. the trial court. (pp. (c) ordering that the land to be adjudicated to the plaintiffs should include the portion where the existing house of the late Maria de la Cruz y Gutierrez is situated. Whether or not the handwritings in the Answer of Maria de la Cruz y Gutierrez were her handwritings. and Fermin de la Cruz. (p. pp. 3. is declared in the name of Maria de la Cruz y Gutierrez. Whether or not the heirs of Maria de la Cruz y Gutierrez are paying the land taxes of the lot in question proportionately to their respective shares. 4. she was in actual possession of the lot in question. Rollo) The issues stated are as follows: 1. ruled in favor of the petitioners. 3. p. That Maria de la Cruz y Guevarra and Fermin de la Cruz y Guevarra did not file their answer over the lot in question. judgment is hereby rendered in favor of the plaintiffs.. Intermediate Appellate Court Decision. 1983 ( ibid. the lot in question. . 1844 into two equal parts in order that two separate titles. in a decision dated November 17. 4647. and 5. Rollo) After trial. Whether or not during the lifetime of Maria de la Cruz y Gutierrez up to the time of her death. If there was fraud in securing OCT No. (b) ordering the parties to cause the survey and division of Lot No. single. 16684 in the name of Maria de la Cruz. 34-42). 1488 covered by Original Certificate of Title No. Intermediate Appellate Court Decision.
and . 20 and 22. Because of her mental weakness. but the same was denied in a resolution dated November 12. and 30 Rollo) The instant petition is impressed with merit. Exhibit "2-C". 28. their action is one based on express trust and not on implied or constructive trust. Exhibit "B-3". The dispositive portion reads: WHEREFORE. 66). was an unlettered woman. considering the action as based on an implied trust. 21. 44-53) reversed the decision of the trial court. Petitioners' predecessor-in-interest.p.. Private respondents argue that said Exhibit "B-3" is a portion of the tax declaration (Exhibit "B") which was prepared by the Office of the Municipal Assessor/Treasurer where the lot in question is located. Petition for Review pp. the Court is constrained to REVERSE the decision appealed from. the then Intermediate Appellate Court in its decision promulgated on June 17. Such fact is corroborated by the testimony of Daniel Lansay. Hence. the son of Maria de la Cruz y Gutierrez that Maria de la Cruz y Guevarra was the one entrusted with the paying of land taxes. obviously on the wrong premise that the action is one based on implied or constructive trust. (pp. Petitioners raised three (3) reasons warranting review. As maintained by petitioners. to wit: I RESPONDENT COURT ERRED WHEN IT RULED THAT THE ACTION FOR RECONVEYANCE FILED BY HEREIN PETITIONERS WITH THE LOWER COURT HAD ALREADY PRESCRIBED. As aptly argued by petitioners. the instant petition. pp. 13. and III RESPONDENT COURT ERRED IN RULING THAT THERE WAS NO EVIDENCE OF FRAUD COMMITTED BY THE PREDECESSOR-IN-INTEREST OF PRIVATE RESPONDENTS IN SECURING TITLE TO THE LOT IN QUESTION. a fact borne out by her affixing her thumbmark in her answer in Cadastral Case No.. II RESPONDENT COURT ERRED IN RULING THAT PETITIONERS WERE GUILTY OF LACHES. The main issue in this case is whether or not petitioners' action for reconveyance has already prescribed. 18. in a prepared document for her. the Court of Appeals erred when it ruled that their action has already prescribed.(e) ordering the defendants to pay the costs of suit. Maria de la Cruz y Gutierrez. she consented and authorized her niece Maria de la Cruz y Guevarra to administer the lot in question. On appeal. 1986 (Ibid. 1986 (Ibid. A new one is hereby entered dismissing the complaint. The answer is in the negative. A Motion for Reconsideration was filed.
an express trust concerning an immovable does not have to be in writing. Since 1966. by some writing or deed or will or by words evidencing an intention to create a trust (Sotto v. Civil Code). Article 1443 may be said to be an extension of the Statute of Frauds. transmitted a cable message to the International Department of PNB to pay the amount of US$14. it is not necessary that the document expressly state and provide for the express trust. 1983 decision of the trial court is hereby REINSTATED. Security Pacific National Bank (SEPAC) of Los Angeles which had an agency arrangement with Philippine National Bank (PNB). It has been held that under the law on Trusts. on February 21. 86 SCRA 154 )." refers merely to enforceability. has not yet prescribed.P. Mata & Co. Private Respondent B. it has acted as a manning or crewing agent for several foreign firms. 104 SCRA 656 ).400. CA Rarely is this Court confronted with a case calling for the delineation in broad strokes of the distinctions between such closely allied concepts as the quasi-contract called "solutio indebiti" under the venerable Spanish Civil Code and the species of implied trust denominated "constructive trusts. Such a case is the one presented to us now which has highlighted more of the affinity and less of the dissimilarity between the two concepts as to lead the legal scholar into the error of interchanging the two. one of which is Star Kist Foods. PNB's International Department noticed an error and sent a service message to SEPAC Bank. Presented below are the factual circumstances that brought into juxtaposition the twin institutions of the Civil Law quasi-contract and the Anglo-American trust. per order of Star Kist. If at all. 154 SCRA 294 ). the June 17. Subsequently. Mata makes advances for the crew's medical expenses. (Mata).. PREMISES CONSIDERED. is a private corporation engaged in providing goods and services to shipping companies. .000 should only be for US$1. which in turn reimburses Mata by sending a telegraphic transfer through banks for credit to the latter's account. Be it noted that Article 1443 of the Civil Code which states "No express trusts concerning an immovable or any interest therein may be proved by parol evidence.clearly not the written instrument constituting an express trust required under Article 1443 of the Civil Code.000 to Mata by crediting the latter's account with the Insular Bank of Asia and America (IBAA). for purposes of validity between the parties. Thus. Teves. Seaman's Welfare fund. being one based on express trust. As part of their agreement. USA (Star Kist). This argument of private respondents. Otherwise stated. 1975. for it may even be created orally. not validity of a contract between the parties. National Seaman's Board fees. 1986 decision of the Intermediate Appellate Court is hereby REVERSED and the November 17. No particular words are required for the creation of an express trust." commonly regarded as of Anglo-American origin. PNB v. An express trust is created by the direct and positive acts of the parties. de Mapa v. Hence. Inc. Upon receipt of this cabled message on February 24. Mata sends monthly billings to its foreign principal Star Kist. no particular words are required for its creation (Article 1444. is untenable. Court of Appeals. petitioner's action. it is only when the trustee repudiates the trust that the period of prescription may run (Enriquez v. excpt as to the latter court's finding that this case deals with an implied trust. it being sufficient that a trust is clearly intended (Vda. SO ORDERED. The latter replied with instructions that the amount of US$14. Against this background. The action to compel the trustee to convey the property registered in his name for the benefit of the cestui for trust does not prescribe. Inc. and standby fees and for the crew's basic personal needs. Court of Appeals. 1975.
on May 13. personal. PNB effected another payment through Cashier's Check No. 1975 Cashier's Check No.400 (P9. real. But the appellate court concluded that petitioner's demand for the return of US$14. held by one party for the benefit of another. Six years later.60) purporting to be another transmittal of reimbursement from Star Kist.772. fourteen days after or on March 11.95) representing reimbursement from Star Kist.878. in the alternative. PNB requested Mata for refund of US$14. paragraph 2 of the Civil Code which states: The following actions must be commenced within six years: xxx xxx xxx (2) Upon a quasi-contract. 1975 through the Insular Bank of Asia and America (IBAA). the instant petition for certiorari proceeding seeking to annul the decision of the appellate court on the basis that Mata's obligation to return US$14. the Regional Trial Court of Manila rendered judgment dismissing the complaint ruling that the instant case falls squarely under Article 2154 on solutio indebiti and not under Article 1456 on constructive trust.60) after it discovered its error in effecting the second payment. Article 2154 states: . by either Article 4 1456 on constructive trust or Article 2154 of the Civil Code on quasi-contract. The lower court ruled out constructive trust. considered a trustee of an implied trust for the benefit of the person from whom the property comes. After trial.On the basis of the cable message dated February 24. 269522 in the amount of US$1. the person obtaining it is. On February 4. money or 2 choses in action. 1981.000 against Mata arguing that based on a constructive trust under Article 1456 of the Civil Code. by force of law. applying strictly the technical definition of a trust as "a right of property. real or personal. recipient is duty bound to return the amount paid by mistake." In affirming the lower court. Consequently. 1982. private respondent's foreign principal.000 cannot prosper because its cause of action had already prescribed under Article 1145. 270271 in the amount of US$14.000 (P97. the appellate court added in its opinion that under Article 2154 on solutio indebiti.000 (P97. the person who makes the payment is the one who commits the mistake vis-a-vis the recipient 3 who is unaware of such a mistake. 1982. 1975 when petitioner mistakenly made payment to private respondent. 1975. On the other hand. or more specifically. almost seven years after March 11.000 is governed. it has a right to recover the said 1 amount it erroneously credited to respondent Mata. that there is a fiduciary relation between a trustee and a cestui que trust as regards certain property.878. was issued by the Star Kist for the account of Mata on February 25. PNB filed a civil case for collection and refund of US$14. Article 1456 of the Civil Code provides: If property is acquired through mistake or fraud. This is because petitioner's complaint was filed only on February 4. Hence. However.
namely PNB. Petitioner naturally opts for an interpretation under constructive trust as its action filed on February 4. In turn. implied trusts come into being by operation of law. in this case PNB. a constructive trust is one not created by words either expressly or impliedly. A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a typical trust. An example of a constructive trust is 11 Article 1456 quoted above. under the Spanish Civil Code. that "the number of quasi contracts may be indefinite. there is neither a promise nor any fiduciary relation to speak of and the 14 so-called trustee neither accepts any trust nor intends holding the property for the beneficiary. the intention of which is found in the nature of the transaction. then the prescriptive period for quasi-contracts of six years applies. Originally. as it is well within the prescriptive period of ten (10) years as provided by Article 5 1144. had no intent of holding the same for a supposed beneficiary or cestui que trust." Moreover. the succeeding article provides that: "The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may 16 come within the purview of the preceding article. On the other hand. the obligation to return it arises. does not emanate from. As pointed out by the appellate court. In the case at bar. unlike an express trust. in receiving the US$14. A resulting trust is a trust raised by implication of law and presumed always to have been contemplated by the parties. However. petitioner's cause of action thereunder shall have prescribed. or generate a fiduciary relation. confidence is reposed in one person who is named a trustee for the benefit of another who is called the cestui que trust. for reasons of justice and equity. even assuming that the instant case constitutes a constructive trust and prescription has not set in. mindful of the position of the eminent Spanish jurist.If something is received when there is no right to demand it.000 in its account through IBAA. even as Article 2142 of the Civil Code defines a quasi-contract. are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by operation of law as matters of equity. the law construes a trust. 1982 can still prosper. While express trusts are created by the intention of the 6 trustor or of the parties. trusts are either express or implied. independently of the 7 particular intention of the parties. But the Code Commission. While in an express trust. there were only two kinds of quasi contracts: negotiorum gestio andsolutio indebiti. To recall. Manresa. respecting property which is held by the trustee for the benefit of the cestui que 13 trust. and it was unduly delivered through mistake. Examples of resulting trusts are found in Articles 1448 to 1455 of the Civil Code. If it is to be construed as a case of payment by mistake or solutio indebiti. Implied trusts are those which." 12 8 . implied trusts are subdivided into resulting and constructive trusts. but by construction of equity in order to satisfy the demands of justice. a beneficiary and a trustee are linked by confidential or fiduciary relations. in a constructive trust. the present action has already been barred by laches. paragraph 2 of the Civil Code. But under Article 1456. but not expressed in the deed or instrument 9 10 of conveyance. without being expressed. a historical note on the codal provisions on trust and quasi-contracts is in order. for the benefit of the person from whom the property comes. Mata. having been brought almost seven years after the cause of action accrued. At this juncture." added Section 3 entitled "Other 15 Quasi-Contracts. A constructive trust. namely a constructive trust. as provided by Article 1145.
although it will force him to return the property.Indubitably." In the case at bar. While the principle of undue enrichment or solutio indebiti. fourteen days later. Strangely. However. in the sense of a meeting of minds between the parties. a payment in the corrected amount of US$1. Under American Law. Undoubtedly. Although we are not quite in accord with the opinion that "the trusts known to American and English 24 equity jurisprudence are derived from the fidei commissa of the Roman Law.400 through Cashier's Check No. the Civil Code does not confine itself exclusively to the quasi-contracts enumerated from Articles 2144 to 2175 but is open to the possibility that. Although the concept of trusts is nowhere to be found in the Spanish Civil Code. on top 20 of quasi-contracts. absent a pre-existing relationship. Further reflection on these concepts reveals that a constructive "trust" is as much a misnomer as a "quasicontract. not because of any intention on their part but in order to prevent unjust enrichment. this time purporting to be another transmittal of reimbursement from Star Kist. private respondent's foreign principal. there is no contract to speak of. quasi-contractual obligations give rise to a personal liability ordinarily enforceable by an action at law. thus giving 23 rise to certain obligations not within the contemplation of the parties. respectively. In analyzing the law on trusts. as in the case of quasi-contract. 270271 in the amount of US$14. it will not impose 21 upon him the numerous fiduciary obligations ordinarily demanded from a trustee of an express trust. there being neither crime nor quasi-delict. To be sure. 269522 had already been made by PNB for the account of Mata on February 25. but he from whom the return is claimed may prove that the delivery was made out of liberality or for any other just 18 cause. a relationship is "forced" by operation of law upon the parties." the chapter on Trusts is fairly recent. which includes constructive trusts. the duty is merely to surrender the property. the distinction is more procedural than 22 substantive. . a quasi-contractual relation may be forced upon the parties to avoid a case 17 of unjust enrichment. a court of equity does not consider a constructive trustee for all purposes as though he were in reality a trustee. is not new. consent is presumed to the end that a recipient of benefits or favors resulting from lawful. the instant case fulfills the indispensable requisites of solutio indebiti as defined in Article 2154 that something (in this case money) has been received when there was no right to demand it and (2) the same was unduly delivered through mistake. "Nemo cum 25 alterius detrimento locupletari potest. the framers of our present Civil Code incorporated implied trusts. 1975. There being no express consent." particularly the concept of constructive trust. in view of the peculiar circumstances or factual environment. it would be instructive to refer to Anglo-American jurisprudence on the subject. having been incorporated in the subject on quasi-contracts in Title XVI of Book IV of the Spanish Civil Code entitled "Obligations incurred 19 without contract. Still applying American case law." so far removed are they from trusts and contracts proper." it is safe to state that their roots are firmly grounded on such Civil Law principles are expressed in the Latin maxim.000. It must be borne in mind that in an express trust. voluntary and unilateral acts of another may not be unjustly enriched at the expense of another. PNB effected another payment through Cashier's Check No. In the case of a constructive trust. while constructive trusts are enforceable by a proceeding in equity to compel the defendant to surrender specific property. however. There is a presumption that there was a mistake in the payment "if something which had never been due or had already been paid was delivered. the trustee has active duties of management while in a constructive trust. both of which embody the principle of equity above strict legalism. having been introduced by the Code Commission in 1949.
Consequently.Returning to the instant case.000 it erroneously paid private respondent under a constructive trust. Hence. it has been deprived of a choice. I On July 23. the recipient commits no 26 mistake. may be barred not only by prescription but also by laches. died in January 1983. the brother of petitioner Ong Ching Po. invoking the appellate court's reasoning. it was error to conclude that in a constructive trust. which dismissed the petition for certiorari in CA-G. would impress upon us that under Article 1456. the decision of the Court of Appeals dismissing petitioner's claim against private respondent is AFFIRMED. CA This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court of the Decision of the Court of Appeals dated July 15. petitioner is well within the prescriptive period for the enforcement of a constructive or implied trust. San Nicolas to private respondent Soledad Parian. 1993. the law does not make any distinction since 27 mutual mistake is a possibility on either side — on the side of either the grantor or the grantee. Ong Ching Po v. Thus. It is amazing that it took petitioner almost seven years before it discovered that it had erroneously paid private respondent. It is unbelievable for a bank. whether resulting or 28 constructive. The latter. petitioner should bear the cost of its own negligence. may commit the mistake. leaving only constructive trust as the feasible option. The said sale was evidenced by a . while petitioner Ong Ching Po died in October 1986. Although we are aware that only seven (7) years lapsed after petitioner erroneously credited private respondent with the said amount and that under Article 1144.R. for prescription has effectively blocked quasi-contract as an alternative. WHEREFORE. we rule that petitioner's claim cannot prosper since it is already barred by laches. Ong Joi Jong sold a parcel of land located at Fundidor Street. It is a well-settled rule now that an action to enforce an implied trust. private respondent. Proceeding now to the issue of whether or not petitioner may still claim the US$14. 1947. CV Nos. We agree with petitioner's stand that under Article 1456. PNB cannot afford to commit such costly mistakes. private respondent contends that the case at bar is one of solutio indebiti and not a constructive trust. the former must perforce bear the consequences of its neglect. to notice its error only seven years later. On the other hand. Petitioner would attribute its mistake to the heavy volume of international transactions handled by the Cable and Remittance Division of the International Department of PNB. like PNB in the case at hand. while petitioner may indeed opt to avail of an action to enforce a constructive trust or the quasi-contract of solutio indebiti. As a universal bank with worldwide operations. Petitioner argues that the lower and appellate courts cannot indulge in semantics by holding that in Article 1456 the recipient commits the mistake while in Article 2154. Moreover. only the person obtaining the property commits a mistake. which regularly publishes its balanced financial statements annually or more frequently. there can be no mutual mistake. we rule in the negative. the wife of Ong Yee. Such specious reasoning is not persuasive. While prescription is concerned with the fact of delay. laches deals with the effect of unreasonable 29 delay. by the quarter. 2839192. as between parties where negligence is imputable to one and not to the other. and a government bank at that. This is because it is also possible that a grantor.
9260 dated September 2. "C") read as follows: Deed of Sale I. When her husband died. private respondent filed a case for unlawful detainer against petitioner Ong Ching Po before the Metropolitan Trial Court of Manila. On March 19. which issued Transfer Certificate of Title No. The decision of the Regional Trial Court was. San Nicolas an (sic) area consisting 213 square meters including a one-story house erected thereon unto Mr. I certify to the truthfulness of this fact. claimed that on July 23. Subsequently. 1984.00 the receipt of which is hereby acknowledged by me and consequently I have executed and signed the government registered title (sic) the said lot inclusive of the house erected thereon. the document was registered with the Register of Deeds of Manila. now belong (sic) to Mr. L o t S e l l e r : O n g . The inferior court dismissed her case. which dismissed the petition. affirmed by the Court of Appeals. 4 Fundidor Street. The decision of the Court of Appeals became final and executory. The dismissal was affirmed by the Regional Trial Court. Branch 26. Unfortunately. Addendum: I have acceded to the request of Mr. petitioners refused to vacate the said premises. Ong Ching Po for the sum of P6. Ong Joi Jong. Petitioners. Branch 10. Ong Ching Po into signing another document in favor of Soledad Parian (She is the Filipino wife of Ong Yee. 1946. a party to this Deed of Sale hereby sell in absolutely (sic) manner a lot located on No. Ong Ching Po unequivocally. "B"). on the other hand." (Exh.000. According to private respondent. Manila. she demanded that the lot be vacated because she was going to sell it. brother of Ong Ching Po) for the purpose of facilitating the issuance of the new title by the City Register of Deeds and for the reason that he is not yet a Filipino. petitioner Ong Ching Po bought the said parcel of land from Ong Joi Jong. 1947 in the name of private respondent.notarized Deed of Sale written in English. An English translation of said document (Exh. And the purpose of this document is to precisely serve as proof of the sale. she entrusted the administration of the lot and building to petitioner Ong Ching Po when she and her husband settled in Iloilo. in turn. The sale was evidenced by a photo copy of a Deed of Sale written in Chinese with the letter head "Sincere Trading Co.
Manila. Manila. p. 86-36818. On May 30 1990. petitioner Ong Ching Po executed a Deed of Absolute Sale conveying to his children. petitioner Yu Siok Lian. As stated by petitioners themselves. petitioners Jimmy and David Ong. "A") in favor of private respondent. Upon her motion. instead of the Deed of Sale (Exh. "B" and its translation. but whether this document is what it purports to be (i. II According to petitioners. 85-33962. the same property sold by Ong Joi Jong to private respondent in 1947. "C") in favor of petitioner Ong Ching Po. in the Regional Trial Court. On July 26. and (3) When it ruled that no express nor implied trust existed between petitioners and private respondent (Rollo. 17-18). On appeal by petitioners to the Court of Appeals. the Court of Appeals erred: (1) When it gave full faith and credit to the Deed of Sale (Exh. On December 12 1985. private respondent filed an action for quieting of title against petitioners Ong Ching Po and his wife. the trial court rendered a decision in favor of private respondent. a deed of conveyance in favor of Soledad Parian [private respondent] or it was only resorted to or executed as a subterfuge because the real buyer (Ong Ching Po) was an alien and it was agreed upon between Ong Ching Po and his brother (Ong Yee. what is in dispute ". 85-33962. Branch 58.e. Exh. pp. Hence. Soledad Parian's husband) that the land be registered in the name of Soledad Parian in order to avoid legal complications and to facilitate registration and transfer and that the said title would be transferred by Soledad to Ong Ching Po or his successors-in-interest and that she would be holding the title in trust for him" (Rollo.J o i J o n g (Exhibits for the plaintiff.. (2) When it concluded that the acts of petitioners were not acts of ownership. We cannot go along with the claim that petitioner Ong Ching Po merely used private respondent as a dummy to have the title over the parcel of land registered in her name because being an alien he was . is not so much as to which between Exhibit "A" and "Exhibit "B" is more weighty. . the case was consolidated with Civil Case No. docketed as Civil Case No. petitioners Ong Ching Po. Jimmy Ong and David Ong filed an action for reconveyance and damages against private respondent in the Regional Trial Court. the said court affirmed the decision of the Regional Trial Court. docketed as Case No. 19-20). 1983. this petition. . 4) On December 6. 1986. pp. Branch 53.
Assuming that the genuineness and due execution of Exhibit "B" has been established. Private land may be transferred or conveyed only to individuals or entities "qualified to acquire lands of the public domain" (II Bernas. possession is transferred to the vendee by virtue of the notarized deed of conveyance. development and utilization" of all "lands of the public domain and other natural resources of the Philippines" for Filipino citizens or corporations at least sixty percent of the capital of which was owned by Filipinos. exploitation. corporations. no private lands shall be transferred or conveyed except to individuals. still petitioners cannot claim ownership of the disputed lot by virtue thereof. Article XII of the 1987 Constitution provides: Save in cases of hereditary succession. On the other end of the legal spectrum. petitioners said that private respondent implied in her deposition that it was her husband who paid for the property. Section 5. that the sale was financed out of conjugal funds and that it was her husband who handled the transaction for the purchase of the property. or associations qualified to acquire or hold lands in the public domain. Aliens. as follows: Save in cases of hereditary succession. he was disqualified from acquiring and owning real property. Such transaction is a common practice in Filipino-family affairs. Assuming that Exhibit "B" is in existence and that it was duly executed. To remove the mantle of validity bestowed by law on said document. or associations qualified to acquire or hold lands in the public domain. have been disqualified from acquiring public lands. corporations. "when the sale is made through a public instrument. therefore. Under the law.]). The Constitution of the Philippines 439-440 [1988 ed. corporations. Article XIV of the 1973 Constitution provides. "A") is a notarized document. they have also been disqualified from acquiring private lands. The 1935 Constitution reserved the right to participate in the "disposition. the execution . petitioners claim that private respondent admitted that she did not pay anything as consideration for the purported sale in her favor. Article XIII of the 1935 Constitution provides. no private land shall be transferred or conveyed except to individuals. as follows: Save in cases of hereditary succession. The capacity to acquire private land is made dependent upon the capacity to acquire or hold lands of the public domain. In the same breath.disqualified to own real property in the Philippines. the deed of sale executed by Ong Joi Jong in favor of private respondent (Exh. Petitioner Ong Ching Po was a Chinese citizen. It is not correct to say that private respondent never took possession of the property. or associations qualified to acquire or hold lands of the public domain in the Philippines. the same is null and void. whether individuals or corporations. Section 14. To sustain such an outrageous contention would be giving a high premium to a violation of our nationalization laws. no private agricultural land shall be transferred or assigned except to individuals. It appears. it being contrary to law. Under Article 1498 of the Civil Code of the Philippines. therefore. Section 7. hence.
or by a recital of its contents in some authentic document. because these documents had not been properly authenticated. or unavailability. Not even Exhibit "B" can be considered as such a document because private respondent. 218 SCRA 602 ). Exhibit "C". The oral testimony to prove the existence of the express trust will not suffice. The due execution of the document may be established by the person or persons who executed it. "No express trust concerning an immovable or any interest therein may be proved by parole evidence. admitted in her testimony in court that Ong Yee was a stockholder of Lam Sing Corporation and was engaged in business. De Leon v. Salao. Furthermore. she was married only on September 6. supra). Molo-Peckson. they can prove an implied trust orally. 1267 ). Art. This order may be changed if necessary in the discretion of the court (De Vera v. Yu Siok Lian. Secondary evidence is admissible when the original documents were actually lost or destroyed. because such kind of evidence may be easily fabricated (Salao v." Undaunted. equivocal or indefinite declarations (Cf.thereof shall be equivalent to the delivery of the object of the contract. or by a person to whom the parties to the instrument had previously confessed the execution thereof (De Vera v. the wife of petitioner Ong Ching Po. saw it and recognized the signatures. There is no document showing the establishment of an express trust by petitioner Ong Ching Po as trustor and private respondent as trustee.. Rule 130 of the Revised Rules of Court: Secondary Evidence when Original is lost or destroyed. contents. upon proof of its execution and lost or destruction. why did she not sign said document. On the other hand. Aguilar. even merely as a witness? Her oral testimony is easy to concoct or fabricate. Under Section 4. 116 Phil. But prior to the introduction of such secondary evidence. When the original writing has been lost or destroyed. the registered owner of the property subject of said "deed of sale. by the person before whom its execution was acknowledged. The Court of Appeals did not give any credence to Exhibit "B" and its translation. petitioners argue that if they cannot prove an express trust in writing. Under Article 1443 of the Civil Code of the Philippines. The correct order of proof is as follows: existence. et al. the evidence must be trustworthy and received by the courts with extreme caution. 1946 to the plaintiff. Petitioners do not claim that Ong Yee was not in a financial position to acquire the land and to introduce the improvements thereon. 70 SCRA 65 ). or cannot be produced in court. the proponent must establish the former existence of the document. or by any person who was present and saw it executed or who after its execution." If what petitioners meant was that private respondent never lived in the building constructed on said land. loss. or by the recollection of the witnesses. Aguilar. but the trial court rejected her claim and held: If it is true that she was present. Petitioners failed to adduce evidence as to the genuineness and due execution of the deed of sale. It cannot be made to rest on vague and uncertain evidence or on loose. in Baguio City where . if from the deed the contrary does not appear or cannot clearly be inferred." was not a party thereto. Ong Ching Po. While an implied trust may be proved orally (Civil Code of the Philippines. execution. 1457). its contents may be proved by a copy. Exhibit "B". it was because her family had settled in Iloilo. Petitioner Yu Siok Lian testified that she was present when said document was executed.
contrary to the specific written instructions of the two insureds? And should attorney’s fees be awarded in this case? These questions confronted the Court in resolving the instant petition for review on certiorari. Branch 33. tax declaration. As observed by the Court of Appeals: We find. that these acts. during the effectivity of the aforementioned marine insurance policies. The Facts As culled from the stipulations between the parties and the assailed Decision. 414). which   assailed the Decision of the Court of Appeals promulgated October 25.000.she apparently resided. As to the contention of petitioners that all the tax receipts. 1974. 10). It is markworthy that all the tax receipts were in the name of private respondent and her husband. The rental receipts were also in the name of her husband. pending a final settlement by and between the two insureds of their respective claims to said proceeds? Can the insurer — whether or not considered a trustee — be held liable for interest on the said insurance proceeds. petitioner reinsured the vessel with a foreign insurance firm. are not necessarily reflective of dominion.00 under Marine Hull Policy MH-1322 and MH-1331. 1975. the vessel ‘M/V TRANSOCEAN SHIPPER’ was lost in the Mediterranean Sea. Rizal Surety v. in Civil Case No. Subsequently. with stipulated value in Philippine Currency of  P23. rental receipts. or after the deed of sale was executed. The insured filed claims against herein petitioner for the insurance proceeds. 6. 1990 affirming and modifying   the decision dated September 19. a partial compromise agreement was entered into between the REPACOM and respondent Transocean regarding the insurance proceeds.500. the Reparations Commission (hereinafter referred to as REPACOM) sold to private respondent Transocean Transport Corporation the vessel ‘M/V TRANSOCEAN SHIPPER’ payable in twenty (20) annual installments. which proceeds the said insurer failed or neglected to deposit in an interest-bearing account. notwithstanding her pretensions to the contrary (Decision p. 125886.000. the factual background of this case is as follows: On December 5. The Court does not believe that she was present during the execution and signing of the deed of sale involved therein. . On June 22.763. deed of sale (Exh. even if true. as even a mere administrator or manager may lawfully perform them pursuant to his appointment or employment (Rollo. Sometime in February. the said vessel was insured with petitioner Rizal Surety & Insurance Company for US$3. private respondent explained that she and her husband entrusted said lot and building to petitioners when they moved to Iloilo. Shortly thereafter. The said policies named REPACOM and herein private respondent as the insured.00. CA Was a trust relationship established between an insurer and the two insureds over the balance of the insurance proceeds being held by the insurer for the account of the two insureds. 1986 of the Regional Trial Court of Manila. however. 1961. Records p. "B") and transfer certificate of title were in their possession. p.
153. The CB’s letter-authorization was addressed to REPACOM.078. and (b) US$3. Manila. the CB authorized petitioner to receive the insurance proceeds from the English re-insurance firm in foreign currency and to deposit it in the same currency with any local bank in  a non-interest bearing account. 1976. despite problems regarding the amount of their respective claims. and on May 25.931. Escolta Branch. either by way of compromise agreement or court litigation. with private respondent and petitioner duly copyfurnished. the latter  sum in a non-interest bearing account as authorized by CB. Copies of this compromise agreement were sent to petitioner. 1977. into an interest-bearing special dollar account with any local commercial bank. 1976. amounting to  US$718. CB authorized it to receive and deposit the dollar insurance proceeds in a non-interest bearing account in the name of petitioner and for the joint  account of REPACOM and private respondent. The CB granted the request subject to conditions. and it was your duty as trustee of the said funds to see  . one of which was that the proceeds be deposited with a  local commercial bank in a special dollar account up to and until July 31. requesting the latter to remit the said US$718. pending which the said balance would continue to be kept in the same bank account in trust for private respondent and REPACOM unless the parties otherwise agree to transfer said balance to another bank account. REPACOM and private respondent then wrote the petitioner on April 21. 1976. REPACOM — US$434. leaving the balance in dispute for future settlement. 1975.618.20 to the Philippine National Bank. 1976 letter-request of the parties. the same should bear interest at the authorized rates. On December 2. Because the parties proposed certain amendments and corrections to the Loss and Subrogation Receipt. a revised version thereof was finally presented to the Office of the Solicitor General. it is clear that effective as of the date of your receipt of a copy of the letter of the Central Bank authorizing the deposit of the amount in an interest-bearing special dollar account x x x. On January 29. 1975. private respondent and REPACOM requested petitioner to pay the  insurance proceeds in their joint names.00. jointly in the names of private respondent and REPACOM.614.On April 18.150. upon the request of petitioner. Having obtained the CB authorization.00). consisting of: (a) P2. and private respondent — US$1. private respondent and REPACOM entered into a partial compromise  agreement. On January 3.078. 1976. wherein they agreed to divide and distribute the insurance proceeds in such a manner that each would receive as its initial share thereof that portion not disputed by the other party (thus. petitioner informed private respondent and REPACOM that the entire insurance proceeds for the loss of the vessel M/V “Transocean Shipper”.00 from local insurance companies and reinsurers. 1975. had been deposited with Prudential Bank and Trust Company.850. private respondent requested the Central Bank (CB) to allow it to retain the expected dollar insurance proceeds for a period  of three (3) months. anticipating payment of the insurance proceeds in dollars. petitioner indicated that it would effect the requested remittance when both REPACOM and private respondent shall have unconditionally and absolutely released petitioner from all liabilities under its policies by executing and delivering the Loss and Subrogation  Receipt prepared by petitioner. 1975. Mendoza wrote petitioner demanding that it pay  interest on the dollar balance per the CB letter-authority. 1976 authorized private respondent and REPACOM to transfer the balance of the insurance proceeds.083. On November 18. then Acting Solicitor General Vicente V. In a reply dated May 10. to enable it to complete its study and decide on how to utilize the said amount.00 from the petitioner’s London insurance broker. On November 20. 1975. the CB on March 15. In response to the March 10.20.  Escolta Branch for their joint account. His letter read in relevant part: “From the foregoing.
should be computed only until January 31. 1978. or by transferring the same into an interest-bearing account with Prudential Bank.20 at 6% per annum. Thus. 1976 until January 31. private respondent filed with the Regional Trial Court of Manila. which neither replied thereto nor complied therewith. The dollar balance of the insurance proceeds was then remitted to the Philippine National Bank. 1977 based on the then prevailing peso-dollar rate of exchange. dated January 31. As trustee. private respondent and REPACOM sent petitioner the duly executed Loss and Subrogation Receipt. which we understand is your sister company. 1977 (when the Loss and Subrogation Receipt was signed) instead of January 10. 1976. The complaint against defendant Prudential Bank and Trust was dismissed for lack of merit. petitioner was ordered to pay (1) interest on the balance of US$718.078. (3) 10% of the total amount claimed as attorney’s fees and (4) costs of suit. petitioner charged that the trial court had seriously erred in finding that a trust relationship existed and that petitioner was liable for the interest on the dollar balance despite the execution of the Loss and Subrogation Receipt wherein petitioner was unconditionally and  absolutely released from all its liabilities under the marine hull policies. to another bank where it could earn interest. Private respondent alleged that the trial court erred when it absolved defendant Prudential Bank from liability and when it ruled that the interest on the balance of the dollar deposit. for which petitioner was held liable. a final compromise agreement was entered into between private respondent and REPACOM. a demand letter for interest on the said dollar balance was sent by private respondent’s counsel to petitioner and Prudential Bank. On April 14. On August 15. On the other hand. 1978. it was your obligation to require the Prudential Bank and Trust Company. 1977. and. Escolta branch for the sole account of private respondent. (iii) REPACOM did not ask petitioner to place the dollars in an interest-bearing account. interests and claims in and to the insurance proceeds. On October 10. (iv) no Loss and Subrogation Receipt was executed. conveyed and assigned to the former all its rights. petitioner through counsel rejected the Acting Solicitor General’s demand. computed from April 21. If you did not wish to transfer the deposit from the Prudential Bank and Trust Company. express or implied. involved in the transaction. (ii) there was no obligation on the part of petitioner to transfer the dollar deposit into an interest-bearing account because the CB authorization was given to REPACOM and not to petitioner. you were morally and legally bound to deposit the funds under terms most advantageous to the beneficiaries. in consideration of an additional sum of one million pesos paid to it by the former. 1979. On September 19. (ii) from April 21. 1977. 1977. at least. 1986. transferred. the trial court issued its decision holding that (i) a trust relationship existed between petitioner as trustee and private respondent and REPACOM as beneficiaries. (2) interest of 6% per annum on the accrued interest earned  until fully paid. Both petitioner and private respondent appealed the trial court’s decision. a complaint for collection of unearned interest on the dollar balance of the insurance proceeds. whereby the latter.  . In view hereof. Branch 33. 1977. 1978 (when the actual transfer of the dollar deposit was made to the bank chosen by private  respondent).” In a reply dated June 14. to place the deposit to an interest-bearing account. we hereby demand in behalf of the Reparations Commission payment of interest on the dollar deposit from the date of your receipt of the authorization by the Central Bank at the authorized rates. asserting that (i) there was no trust relationship. On February 27.to it that the same earned the interest authorized by the Central Bank. and (iii) this duty to deposit the funds in an interest-bearing account ended when private respondent signed the Loss and Subrogation Receipt on January 31. petitioner should have deposited the remaining dollar deposit in an interest-bearing account either by remitting the same to the PNB in compliance with the request of REPACOM and private respondent. without prejudice to their claim for interest on the dollar balance from the time CB authorized its placement in an interest bearing account.
. not as insurer. As for the Loss and Subrogation document. and IV. The respondent Court modified the trial court’s judgment by ordering petitioner to pay said interest computed from April 21. 1978. the appellate Court ruled that petitioner gave undue importance thereto. plus attorney’s fees and expenses of litigation xxx. petitioner continues to deny the existence of the trust. in respect of the principal amount representing the insurance proceeds. xxx in affirming the RTC decision which incorrectly awarded attorney’s fees and costs of suit to  Transocean. and in not ordering Transocean to pay to Rizal moral and punitive damages xxx. Furthermore. i. III. petitioner insists that the Loss and Subrogation Receipt signed by the insureds released and absolved petitioner from all liabilities. on the other. and IV. intended to create a trust. The existence of a trust relationship. Reiterating the arguments it ventilated before the respondent appellate Court. 1977.e. xxx when it held that Rizal is liable to Transocean for supposed interest on the balance of US$718. On December 17. petitioner was released only from its liabilities arising from the insurance policies. and that the execution thereof did not bar the claims for accrued interest. the Court of Appeals denied the petitioner’s motion for reconsideration. 1976 up to January 10. which arose from the violation of its duty as trustee — i. Correctness of the award of attorney’s fees. the key issues in this case may be re-stated thus: I. II. xxx in not holding that Transocean had acted in palpable bad faith and with malice in filing this clearly unfounded civil action. Hence.078. under terms most advantageous to the beneficiaries. but not insofar as its liability for accrued interest was concerned. alleging that it never intended to enter into a fiduciary relationship with private respondent and REPACOM and that it held on to the dollar balance only as a means to protect its interest. xxx in assuming that REPACOM and Transocean on one hand and Rizal.e. and confirmed that a trust had in fact been established and that petitioner became liable for interest on the dollar account in its capacity as trustee. The significance of the Loss and Subrogation Receipt. Briefly. including the claimed interest. the Court of Appeals upheld the judgment of the trial court. II. this petition.20 after admitting that Transocean and REPACOM had unconditionally and absolutely released and discharged Rizal from its total liabilities when they signed the loss and subrogation receipt xxx on January 31. III. By virtue of that document. its refusal to deposit the dollar balance in an interest-bearing account. At the heart of the matter is the question of whether the petitioner is liable for accrued interest on the dollar balance of the insurance proceeds..” The foregoing grounds are almost exactly the same grounds pleaded by petitioner before the respondent Court. 1990. 1990. Assignment of Errors Petitioner alleges that the Court of Appeals erred: “I..On October 25. Petitioner’s liability for accrued interest on the dollar balance.
078. or was it also a trustee? In ruling that petitioner was a trustee of the private respondent and REPACOM.” It further states. it requested that its authority to deposit the dollar proceeds with any local bank be amended by allowing it to deposit the same in the name of “Rizal Surety & Insurance Company for the joint account of the Reparations Commission and Transocean Transport Corporation. First Issue: The Trust Relationship Crucial in the resolution of this case is the determination of the role played by petitioner. 4. The disputed portion or the balance of the insurance proceeds remaining after deducting the undisputed portions as agreed above shall be kept in the same bank deposit in trust for and in the joint name of REPACOM and TRANSOCEAN until such time as there is a court decision or a compromise agreement on the full amount or portion thereof. defendant RIZAL’s letter to REPACOM and plaintiff corporation confirming the fact that the insurance proceeds were then deposited with Prudential Bank and it was recorded under the name of Rizal Surety & Insurance Company for the joint account of Transocean Transport Corporation and REPACOM (Exhibit L). Reparations Commission and Transocean Transport Corporation. 2. it is very clear that the parties thereto intended that the entire dollar insurance proceeds be held in trust by defendant RIZAL for the benefit of REPACOM and plaintiff corporation. or until such time as REPACOM and TRANSOCEAN shall agree jointly to transfer such balance to another bank account. 1976 over the division of the insurance proceeds which provides as follows: “4.” . last 18 November 1975.” (E xhibit I). That pursuant to RIZAL’s letter to the Central Bank dated November 25. 1975. We searched for arguments that could constitute reversible errors committed by respondent Court.20 as trustee for the benefit of REPACOM and plaintiff corporation (private respondent herein) upon consideration of the following facts and the said court’s observation — ‘1. the Court of Appeals ratiocinated thus: “The respondent (trial) court sustained the theory of TRANSOCEAN and was of the view that RIZAL held the dollar balance of US$718. to wit: “This is in conformity with our agreement on this matter with the respective officers of our insureds. The partial compromise agreement entered into between the insureds on January 29.The Court’s Ruling The shop-worn arguments recycled by petitioner are mainly devoid of merit. during our conference held in the office of Solicitor General Estelito Mendoza. but found only one in the last issue. This agreement was further fortified by the Central Bank’s reply to the above-mentioned letter authorizing RIZAL to deposit the dollar insurance proceeds in the name of “Rizal Surety & Insurance Company for the joint account of Transocean Transport Corporation and Reparations Commission” (Exhibit J). From these facts. Did it act merely as an insurer. Likewise. 3.
CA. over the dollar insurance proceeds of the lost vessel. the surrounding factual circumstances. x x x. the Partial Compromise Agreement explicitly states that the dollars ‘shall be kept in the same bank deposits in trust for and in the joint name of REPACOM and TRANSOCEAN. as that would be tantamount to full payment of the loss without first secu ring petitioner’s release from its liabilities under the insurance policies. 1975 which first ordered petitioner to receive the dollar insurance proceeds and deposit the same with any local bank in a noninterest bearing account in the names of Transocean and REPACOM jointly. that RIZAL was not a party to the Compromise Agreement. and that therefore. It is basic in law that a trust is the right. especially between defendant RIZAL on one hand and REPACOM and the plaintiff corporation. into concluding that a trust relationship had been created. Express trusts are created by the intention of the trustor or of the parties.’ While it is true.” Petitioner insists it was never a party to said compromi se agreement. On the contrary. therefore. Thus: ‘Such a manifestation can in fact be determined merely by construction of. the legal title to which is vested in another. In short. x x x’ Indeed.e. RIZAL even implemented certain provisions thereof. it should not be held bound by anything contained therein. the trustee) to deal with the property for the benefit of another (i. created a trust relationship between RIZAL on one hand and the REPACOM and plaintiff corporation on the other. we hold that the courts below were correct in concluding that a trust relationship existed. the beneficiary). on the other. RIZAL was furnished a copy of the same and did not in any way manifest objection thereto. Petitioner insists that it did so only in reaction to the earlier CB letter dated November 20. Trusts are either express or implied. No repudiation was ever made or any one of the parties for that matter questioned said agreement. to create a trust.. on the other hand. and does not rest on loose.e. Petitioner further scores the respondent Court for relying on the two insured’s arrangement contained in the Partial Compromise Agreement that the dollar balance be kept in the same bank deposit (held by petitioner) “in trust for and in the joint name of REPACOM and TRANSOCEAN. to  the beneficial enjoyment of property.’” Petitioner claims that respondent Court was misled by the trial court’s crucial mis -assumption that  petitioner was the one which took the initiative of requesting authorization from CB to deposit the dollar proceeds in its name.It appears clearly that even from the start of the communications among themselves. There was. equivocal or indefinite declarations’ (Medina vs. the aforesaid enumerated facts sufficiently manifest the intention between REPACOM and TRANSOCEAN on one hand and RIZAL.. 109 SCRA 437). It was RIZAL itself which requested the Central Bank that it be allowed to deposit the dollars in its name and ‘for the joint account of REPACOM and TRANSOCEAN’ instead of in the joint account of REPACOM and TRANSOCEAN as originally authorized. so long as the proof thereof is clear. and inference from. and that it (petitioner) made such request to avoid having the dollar proceeds paid directly to the account of the two insured. it shows that the parties intended that the dollar insurance proceeds be held in the name of defendant RIZAL for the joint benefit of REPACOM and plaintiff corporation. . enforceable solely in equity. The Civil Code provides that: “Article 1441. satisfactory. xxx xxx xxx The intention to create a trust relation can be inferred from the surrounding factual circumstances. It is a fiduciary  relationship concerning property which obliges a person holding it (i. and simply because it “did not in  any way manifest objection thereto” Petitioner’s arguments notwithstanding. nevertheless. Moreover. petitioner claims it was just trying to protect its interest when it made such request. and convincing.
pp. In Mindanao Development Authority vs. it undoubtedly became aware — if it was not already aware even prior thereto — that the parties to said agreement considered petitioner as their trustee in respect of said dollar balance. it is all too evident that petitioner fully grasped the situation and realized that private respondent and REPACOM were constituting petitioner their trustee. Furthermore. The evidence on record is clear that petitioner held on to the dollar balance of the insurance proceeds because (1) private respondent and REPACOM requested it to do so as they had not yet agreed on the amount of their respective claims. as it was not yet granted the right of subrogation over the total loss of the vessel.  this Court held: “x x x It is fundamental in the law of trusts that certain requirements must exist before an express trust will be recognized. petitioner never committed any act amounting to an unequivocal repudiation of its role as trustee. and sufficiently certain beneficiaries. 31. This is the essence of the trust flowing from the actions and communications of petitioner. i. may enforce.” Express trusts are created by direct and positive acts of the parties.  or by words either expressly or impliedly evincing an intention to create a trust. there must be a present and complete disposition of the trust property. all the abovementioned elements are present in the instant case. petitioner held on to the dollar balance of the insurance proceeds to protect its interest. petitioner not only did not manifest any objection thereto. Yet.“Article 1444. but it instead proceeded to accept its role and responsibility as such trustee by implementing the compromise agreement. petitioner’s letter dated November 20.. it being sufficient that a trust is clearly intended. albeit the latter declined to accept since the dispute as to their respective claims could not yet be resolved at that time. As petitioner continued holding on to the deposit for the benefit of private respondent and REPACOM.) Undeniably. A declaration of terms is essential.” (citing Sec. Petitioner’s argument that it was never a party to the Partial Compromise Agreement is unavailing. since. it made several tenders of payment to the private respondent and REPACOM. Basically. By its own allegation. but nevertheless each of the above elements is required to be established. 278-279. if any one of them is missing. or will. 1977. upon being furnished a copy of the same. and that the court. petitioner obviously recognized its fiduciary relationship with said parties. There must also be some power of administration other than a mere duty to perform a contract although the contract is for a third-party beneficiary. and the Final Compromise Agreement was yet to be executed.e. the trust. . 1975 addressed to the CB expressly stated that the deposit in Prudential Bank was being made in its name for the joint account of the private respondent and REPACOM. these elements include a competent trustor and trustee. Petitioner never claimed ownership over the funds in said deposit. prior to January 31. The so-called adversary positions of the parties had no effect on the trust as it never changed the position of the parties in relation to each other and to the dollar proceeds. in short. Trusts. No particular words are required for the creation of an express trust. notwithstanding that the enjoyment in the beneficiary will take place in the future. Court of Appeals . and. too. by some writing or deed. Furthermore. an ascertainable trust res. Am Jur 2d. which were the real owners of the money. It is essential. petitioner held it for private respondent and REPACOM. if called upon so to do. that the purpose be an active one to prevent trust from being executed into a legal estate or interest. and these must be stated with reasonable certainty in order that the trustee may administer. signed the Loss and Subrogation Receipt in favor of petitioner. and (2) they had not. it is fatal to the trusts (sic). Equally as significant. Petitioner’s desperate attempt to establish a viable defense by way of its allegation that no fiduciary relationship could have existed because of the joint insured’s adversary positions with respect to the insurance proceeds deserves scant consideration. Stilted formalities are unnecessary. and one that is not in contravention of some prohibition of statute or rule of public policy. In fact.
corporations or properties to the full extent of the abovementioned payment received by us. or in the future might have. Third Issue: Liability of Petitioner For Accrued Interest Petitioner argues. it was also not obligated — and hence it did not bother — to advise private respondent and REPACOM that it would neither remit the dollar balance to the insured’s bank of choice as specifically instructed. 1977. that it was of the belief that. despite its having . against all persons.Second Issue: The Significance Of The Loss and Subrogation Receipt The respondent Court committed no reversible error in its appreciation of the Loss and Subrogation Receipt. U-1) signed by TRANSOCEAN and REPACOM in an effort to absolve itself from liability. in regard to the principal amount representing the insurance proceeds but not to the accrued interest which stemmed from its refusal to deposit the disputed dollar portion in violation of its duty as a trustee to deposit the same under the terms most advantageous to TRANSOCEAN and REPACOM. The respondent Court correctly held that: “RIZAL gives undue importance to the Loss and Subrogation Receipt (Exh. that is. Corollary thereto. Petitioner’s other contention that it was not bound by the CB order. we hereby assign. It did not exculpate petitioner from its liability for the accrued interest as this obligation arose in connection with its role as trustee and its unjustified refusal to deposit the money in an interest-bearing account as required. But this was done only on October 10. entity. in response to the letter of private respondent and REPACOM to petitioner dated April 21. interests and demands of whatever nature against any person. rather unconvincingly. corporation or property arising from or otherwise connected with such total loss of the insured property and we hereby acknowledge that the said Company is subrogated in our place and stead to any and all claims. as insurer. RIZAL was subrogated to the rights which stemmed from the insurance contract but not to those which arise from the trust relationship.” At most. which reads in relevant part: “x x x we have unconditionally and absolutely accepted full payment from Rizal Surety & Insurance Company. Thus. petitioner reiterated its offer to pay the balance of the insurance claim provided the former sign the Loss and Subrogation Receipt. the signing of the Loss and Subrogation Receipt was a valid pre-condition before petitioner could be compelled to turn over the whole amount of the insurance proceeds to the two insured. interests and demands that we have. nor just deposit the same in an interest-bearing account at Prudential Bank. 1975. that would lead to an absurd situation. of its total liabilities. as it was never the trustee for the insured and thus was under no obligation to execute the instruction to transfer the dollar balance into an interest-bearing account. TRANSOCEAN and REPACOM released RIZAL only from its (RIZAL) liabilities arising from the insurance policies issued. entities. In consideration of this full payment.” Said receipt absolved the petitioner only from all claims arising from the insurance policies it issued. cede and transfer to said Insurance Company any and all claims. otherwise. therefore. The execution of the said Loss and Subrogation Receipt did not preclude the joint insured from claiming the accrued interest.
Beyond the foregoing considerations. is even more ridiculous and undeserving of further comment. This falls far short of the requirement to clearly inform the trustor-beneficiaries of petitioner’s refusal or inability to comply with said request/instruction. one looks at it. Instead of doing thus. We agree with private respondent that the dollar balance of US$718. However. as trustee.078. At that point. Originally. While judicial discretion is here extant. petitioner merely tendered payment of the said dollar balance in exchange for the signed Loss and Subrogation Receipt. or indirectly as by enabling its sister company to earn income on the dollar balance. vs. for whatever reason. as a matter of ordinary common sense and common decency. This we cannot let pass. repeating the oft-heard refrain that it is not sound public policy to place a premium on the right to litigate. It is well settled that attorney’s fees should not be awarded in the absence of stipulation except under the instances enumerated in Art. the latter ought. such prejudice could have been prevented had petitioner acted promptly and in good faith by communicating its real intentions to the trustors. After petitioner’s receipt of the April 21. Leaving such an enormous amount in a non-interest bearing bank account for an extended period of time — about one year and nine months — would undoubtedly have not only prejudiced the owner(s) of the funds. 2208 of the New Civil Code. we must also make mention of the matter of undue enrichment. Court of Appeals: “Article 2208 of the Civil Code allows attorney’s fees to be awarded by a court when its claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought. As held by this Court in Solid Homes. And whether petitioner benefitted directly. This is the very least it could have done if indeed it wanted to repudiate its role as trustee or be relieved of its obligations as such trustee at that point. simply because said order was not directed to it. but. private respondent and REPACOM. as shown by its November 25. it could have easily discharged its obligation by simply transferring and paying the dollar balance to private respondent and REPACOM and by so doing. and for the ultimate benefit of petitioner or its stockholders. would have dissolved the trust.  Inc. Such silence and inaction in the face of specific written instructions from the trustors-beneficiaries could not but have misled the latter into thinking that the trustee was amenable to and was carrying out their instructions. The result was that the trustorsbeneficiaries. carry out said instructions. would have resulted to the immense benefit of Prudential Bank (which happens to be a sister company of the petitioner). However. it is grossly unfair for anyone to earn income on the money of another and still refuse to share any part of that income with the latter. As already mentioned. equally as true. when the trustors instructed petitioner as trustee to deposit the funds in an interest-bearing account. suffered prejudice in the form of loss of interest income on the dollar balance. there being no reason for them to think otherwise. 1976 letter of private respondent and REPACOM requesting petitioner to remit the dollar balance to an interest-bearing account. to have at least informed the insured that it could not or would not. which beyond the shadow of a doubt must have earned income thereon by utilizing and relending the same without having to pay any interest cost thereon.been informed thereof and copy furnished by private respondent and REPACOM. Fourth Issue: Award of Attorney’s Fees is Improper Petitioner argues that respondent Court erred in affirming RTC’s award of attorney’s fees and costs of suit.20 was certainly a large sum of money. The fact is that petitioner’s violation of its duty as trustee was at the expense of private respondent. petitioner chose to remain silent. petitioner. is immaterial. 1975 letter. This in turn prevented the trustors-beneficiaries from early on taking action to discharge the unwilling trustee and appointing a new trustee in its place or from otherwise effecting the transfer of the deposit into an interest-bearing account. an . only agreed to receive and deposit the money under its name for the joint account of the private respondent and REPACOM in a noninterest bearing account.
later on. 84 SCRA 337. Hence. This was made clear in an employment advice dated January 13. Stronghold Insurance Company. 67970. otherwise. private respondent paid for the share but had it listed in petitioner’s name.” . De la Cruz. A perusal of the text of the decisions of the trial court and the appellate Court reveals the absence of any justification for the award of attorney’s fees made in the fallo or dispositive portions. the American Chamber of Commerce of the Philippines. vs. No. 1986. 1979-1989. In the case at bench. SO ORDERED. wherein petitioner was informed by private respondent as follows: xxx xxx xxx  “11. The matter cannot and should not be left to speculation and conjecture (Mirasol vs. THE DECISION APPEALED FROM IS HEREBY SET ASIDE. Inc. vs. A. the petition is DENIED. retired as AmCham’s President. legal or equitable justification. this Court held in Stronghold Insurance Company. Court of Appeals  that: “In Abrogar v. However. the Chamber is willing to acquire for your use a membership in the Manila Polo Club. the records do not show enough basis for sustaining the award for attorney’s fees and to adjudge its payment by petitioner. Inc. ANOTHER JUDGMENT IS ENTERED ORDERING DEFENDANT-APPELLEE MARSH THOMSON TO TRANSFER THE SAID MPC [Manila Polo Club] SHARE TO THE NOMINEE OF THE APPELLANT. 1994. 157 SCRA 57] the Court had occasion to state that ‘[t]he reason for the award of attorney’s fees must be stated in the text of the court’s decision. 173 SCRA 619). the same should be disallowed and deleted. through the intercession of Burridge. x x x” Likewise.award thereof demands.” The facts of the case are: Petitioner Marsh Thomson (Thomson) was the Executive Vice-President and. you would execute such documents as necessary to acknowledge beneficial ownership thereof by the  Chamber. Inc. and the assailed Decision is hereby AFFIRMED with the sole modification that the award of attorney’s fees in favor of private respondent is DELETED. Intermediate Appellate Court [G. his superior. 1988. disposing as follows: “WHEREFORE. January 15. (AmCham) for over ten years. If the membership is acquired in your name. he wanted to transfer his proprietary share in the Manila Polo Club (MPC) to petitioner. WHEREFORE. The timing of such acquisition shall be subject to the discretion of the Board based on the Chamber’s financial position. Court of Appeals. if it is stated only in the dispositive portion of the decision. Before Burridge decided to return to his home country. the Management Consultant of private respondent. If you so desire.’ x x x” The Court finds that the same situation obtains in this case.R. Lewis Burridge. Marsh Thomson v. the same must be disallowed on appeal. All dues and other charges relating to such membership shall be for your personal account. While petitioner was still working with private respondent. a factual. CA This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals on May 19. nevertheless.
” When petitioner’s contract of employment was up for renewal in 1989. MPC issued Proprietary Membership Certificate Number 3398 in favor of petitioner.xxx xxx xxx On April 25. petitioner paid the transfer fee of P40.  employees and/or representatives may have against J. as confirmed in a  letter of notification to the Manila Polo Club. but private respondent subsequently reimbursed this amount. 1986. 1988 and January 7. 1989. or one hundred ten thousand pesos (P110. officers and assigns. On November 19. expressed in general terms. officers and assigns. you will execute such documents as are necessary to acknowledge that the Chamber is the beneficial owner  of your membership in the Club. 1989. 1986. MARSH THOMSON from any and all existing claims that the AMCHAM.000. failed to execute a document recognizing private respondent’s beneficial ownership over said share. On April 5. however. as well March 4. Petitioner indicated his acceptance of the consultancy arrangement with a counter-proposal in his letter dated October 8. private respondent executed on  September 29.000. he notified private respondent that he would no longer be available as Executive Vice President after September 30. did not mention specifically the MPC share. mentioned the MPC share.    1986. to wit: all dues and other charges relating to such membership shall be for your personal account and. waive. employees and/or representatives do hereby release. among others as follows: “11. the private respondent asked the petitioner to stay on for another six (6) months. But petitioner never acknowledged that private respondent is the beneficial owner of the share as requested in follow-up requests. Following AmCham’s policy and practice. stating that “AMCHAM. MARSH THOMSON.” . Burridge transferred said proprietary share to petitioner. But petitioner.” The quitclaim. subject to my reimbursing the purchase price to the  Chamber. 1988 as follows: “Dear Marsh: x x x xxx xxx All other provisions of your compensation/benefit package will remain the same and are summarized as follows: xxx xxx xxx 9) The Manila Polo Club membership provided by the Chamber for you and your family will continue on the same basis. its directors.” Private respondent rejected petitioner’s counter-proposal.) Retention of the Polo Club share. its directors. private respondent. abandon and discharge J.00). through counsel sent a letter to the petitioner demanding the  return and delivery of the MPC share which “it (AmCham) owns and placed in your (Thomson’s) name. Separate letters of employment advice dated October 1. 1990. Still. Upon his admission as a new member of the MPC. 1989. Pending the negotiation for the consultancy arrangement. if you have not already done so. 1989 a Release and Quitclaim. there was a yearly renewal of employment contract between the petitioner and private respondent.00 from his own funds. particularly one dated March 4.
B-1. This is evident from the exhibits (E & G) where defendant asked that he retained the Polo Club membership upon reimbursement of its purchase price. however. The latter was to execute the necessary documents to acknowledge ownership of the Polo membership in favor of plaintiff. 2. private respondent filed on May 15. after my long years of dedication to the Chamber’s interest. “The foregoing considered judgment is rendered as follows: 1. x x x “It is for the foregoing reasons that the Court rules that the ownership of the questioned Polo Club  membership be retained by defendant. private respondent appealed to the Court of Appeals. to be club members. D.00 Because both parties thru their respective faults have somehow contributed to the birth of this case.’ xxx xxx xxx  thus: “Notwithstanding all these evidence in favor of plaintiff. C.” In said decision. By such express conformity of the appellee. and where he showed his ‘profound disappointment.) Defendant shall pay plaintiff the sum of P300. the trial court promulgated its decision. (Exh. CV No. the defendant had second thoughts and decided to keep the membership for himself. x x x. D-1. the former was bound to recognize the appellant as the owner of the said share for a contract has the force of law . ratiocinating in this manner: “An assessment of the evidence adduced by both parties at the trial will show clearly that it was the intention of the parties that a membership to Manila Polo Club was to be secured by plaintiff [herein private respondent] for defendant’s [herein petitioner] use. when the parties parted ways in disagreement and with some degree of bitterness. and at what I consider to be harsh terms. On May 19.” Not satisfied with the trial court’s decision. inter alia.” On February 28. B. each  shall bear the incidental expenses incurred.R.000. defendant may not be declared the owner of the contested membership nor be compelled to execute documents transferring the Polo Membership to plaintiff or the latter’s nominee for the reason that this is prohibited by Polo Club’s Articles & By-Laws. 1990.) The ownership of the contested Manila Polo Club share is adjudicated in favor of defendant Marsh Thomson. a complaint against petitioner praying. the trial court awarded the MPC share to defendant (petitioner now) on the ground that the Articles of Incorporation and By-laws of Manila Polo Club prohibit artificial persons. such as corporations. the Court of Appeals (Former Special Sixth Division) promulgated its decision in said CA-G. 1992. C par 9) However. 1994. reversing the trial court’s judgment and ordered herein petitioner to transfer the MPC share to the nominee of private respondent. reasoning thus: xxx xxx xxx  “The significant fact in the instant case is that the appellant [herein private respondent] purchased the MPC share for the use of the appellee [herein petitioner] and the latter expressly conformed thereto as shown in Exhibits A-1. that the Makati Regional Trial Court render judgment ordering Thomson “to  return the Manila Polo Club share to the plaintiff and transfer said share to the nominee of plaintiff. 38417. and.Failing to get a favorable response. C-1. both at the previous Board’s unfair action.
In trust. pp. becoming a stockholder or shareholder in other corporations is not one of the express or  implied powers fixed in AmCham’s said corporate franchis e. August 30. and in not confirming petitioner’s ownership over the MPC membership share. Sasuhura Company. x x  x” On 16 June 1994. unless its return was earlier requested in writing (Exh. were it not for the opposite results reached by the courts below. and the purposes for which it is dedicated. this Court has given due course to the petition.. 19-20. The respondent Court of Appeals erred in rendering judgment ordering petitioner to transfer the contested MPC share to a nominee of respondent AmCham notwithstanding that: (a) AmCham has no standing in the Manila Polo Club (MPC). we must clearly distinguish a debt from a trust. it is precluded under MPC’s Articles of Incorporation and governing rules and regulations from owning a proprietary share or from becoming a member thereof. refers to the Manila Polo Club share (tsn. Inc. The respondent Court of Appeals erred in setting aside the Decision dated 28 February 1992 of the Regional Trial Court. asserting that he merely incurred a debt to respondent when the latter advanced the funds for the purchase of the share. 200 SCRA 450. and (b) even under AmCham’s Articles of Incorporation. Metro Manila. he admitted that the proprietary share listed as one of the assets of the appellant corporation in its 1988 Corporate Income Tax Return. vs. And this Court could have dismissed the petition outright. As posited above. As such they are best left to the trial and appellate courts’ disposition. IAC. III. To resolve the first issue. NCJR. 1994. On the other hand. Ltd. in its Civil Case No. 1989 wherein again the appellee acknowledged that the appellant owned the MPC share. there is a fiduciary relation between a trustee and a beneficiary. The beneficiary of a trust has beneficial interest in the trust property. Moreover. we find there are two main issues to be resolved: (1) Did respondent court err in holding that private respondent is the beneficial owner of the disputed share? (2) Did the respondent court err in ordering petitioner to transfer said share to private respondent’s nominee? Petitioner claims ownership of the MPC share. there being absolutely no evidence to support such a conclusion and/or such inference is manifestly mistaken. II. (2) he obliged himself to return the MPC share after his six month consultancy contract had elapsed. petitioner alleges the following errors of public respondent as grounds for our review: I. but the beneficial title belongs to private respondent. I). which he signed as the latter’s Executive Vice President (prior to its filing). and being an artificial person. for the enhanced appreciation of the jural relationship between the parties involving trust. petitioner filed a motion for reconsideration of said decision. In this petition for review. Makati.between the parties. E and E-1) upon the termination of his employment. 1989 was superseded by the contractual agreement entered into by the parties on October 13. 901286. Branch 65.. After carefully considering the pleadings on record. the appellee conceded the true ownership of the said share to the appellant when (1) he offered to buy the MPC share from the appellant (Exhs. these assigned errors show the disputed matters herein are mainly factual. The respondent Court of Appeals erred in ruling that “the Quitclaim executed by AmCham in favor of petitioner on September 29. private respondent asserts beneficial ownership whereby petitioner only holds the share in his name. (Alim vs. 205 SCRA 632) Aside from the foregoing. By  resolution promulgated on August 4. but there is no such relation between a debtor and creditor. 1991). while a creditor has merely a personal claim against the debtor. and (3) on cross-examination. CA. the Court of Appeals denied the motion for reconsideration. which we now decide. While a debt implies merely an  .
obligation to pay a certain sum of money, a trust refers to a duty to deal with a specific property for the benefit of another. If a creditor-debtor relationship exists, but not a fiduciary relationship between the parties, there is no express trust. However, it is understood that when the purported trustee of funds is entitled to use them as his or her own (and commingle them with his or her own money), a debtor creditor relationship exists, not a trust. In the present case, as the Executive Vice-President of AmCham, petitioner occupied a fiduciary position in the business of Amcham. AmCham released the funds to acquire a share in the Club for the use of petitioner but obliged him to “execute such document as necessary to acknowledge beneficial  ownership thereof by the Chamber”. A trust relationship is, therefore, manifestly indicated. Moreover, petitioner failed to present evidence to support his allegation of being merely a debtor when the private respondent paid the purchase price of the MPC share. Applicable here is the rule that a trust arises in favor of one who pays the purchase money of property in the name of another, because of  the presumption that he who pays for a thing intends a beneficial interest therein for himself. Although petitioner initiated the acquisition of the share, evidence on record shows that private respondent acquired said share with its funds. Petitioner did not pay for said share, although he later wanted to, but according to his own terms, particularly the price thereof. Private respondent’s evident purpose in acquiring the share was to provide additional incentive and perks to its chosen executive, the petitioner himself. Such intention was repeated in the yearly employment advice prepared by AmCham for petitioner’s concurrence. In the cited employment advice, dated March 4, 1988, private respondent once again, asked the petitioner to execute proof to recognize the trust agreement in writing: “The Manila Polo membership provided by the Chamber for you and your family will continue on the same basis, to wit: all dues and other charges relating to such membership shall be for your personal account and, if you have not already done so, you will execute such documents as are necessary to  acknowledge that the Chamber is the beneficial owner of your membership in the Club.” Petitioner voluntarily affixed his signature to conform with the employment advice, including his obligation stated therein -- for him to execute the necessary document to recognize his employer as the beneficial owner of the MPC share. Now, we cannot hear him claiming otherwise, in derogation of said undertaking, without legal and equitable justification. For private respondent’s intention to hold on to its beneficial ownership is not only presumed; it was expressed in writing at the very outset. Although the share was placed in the name of petitioner, his title is limited to the usufruct, that is, to enjoy the facilities and privileges of such membership in the club appertaining to the share. Such arrangement reflects a trust relationship governed by law and equity. While private respondent paid the purchase price for the share, petitioner was given legal title thereto. Thus, a resulting trust is presumed as a matter of law. The burden then shifted to the transferee to show otherwise, that it was just a loan. Such resulting trust could have been rebutted by proof of a contrary intention by a showing that, in fact, no trust was intended. Petitioner could have negated the trust agreement by contrary, consistent and convincing evidence on rebuttal. However, on the witness stand, petitioner failed to do so persuasively. On cross-examination, the petitioner testified as follows: “ATTY. AQUINO (continuing) Q. Okay, let me go to the cash advance that you mentioned Mr. Witness, is there any document proving that you claimed cash advance signed by an officer of the Chamber? A. I believe the best evidence is the check.
Q. Is there any document? COURT Other than the Check? MR. THOMSON Nothing more. ATTY. AQUINO Is there any application filed in the Chamber to avail of this cash advance? A. Verbal only. Q. Nothing written, and can you tell to this Honorable Court what are the stipulations or conditions, or terms of this transaction of securing this cash advance or loan? xxx COURT How are you going to repay the cash advance? MR THOMSON The cash advance, we never stipulate when I have to repay it, but I presume that I would, when  able to repay the money.” In deciding whether the property was wrongfully appropriated or retained and what the intent of the parties was at the time of the conveyance, the court must rely upon its impression of the credibility  of the witnesses. Intent is a question of fact, the determination of which is not reviewable unless the  conclusion drawn by the trier is one which could not reasonably be drawn. Petitioner’s denial is not adequate to rebut the trust. Time and again, we have ruled that denials, if unsubstantiated by clear and  convincing evidence, are deemed negative and self-serving evidence, unworthy of credence. The trust between the parties having been established, petitioner advanced an alternative defense that the private respondent waived the beneficial ownership of MPC share by issuing the Release and Quitclaim in his favor. This argument is less than persuasive. The quitclaim executed by private respondent does not clearly show the intent to include therein the ownership over the MPC share. Private respondent even asserts that at the time the Release and Quitclaim was executed on September 29, 1989, the ownership of the MPC share was not controversial nor contested. Settled is the rule that a waiver to be valid and effective must, in the first place, be couched in clear and unequivocal terms which leave no doubt as to  the intention of a party to give up a right or benefit which legally pertains to him. A waiver may not be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon  a right vested in such person. If we apply the standard rule that waiver must be cast in clear and unequivocal terms, then clearly the general terms of the cited release and quitclaim indicates merely a clearance from general accountability, not specifically a waiver of AmCham’s beneficial ownership of the disputed shares. Additionally, the intention to waive a right or advantage must be shown clearly and convincingly, and when the only proof of intention rests in what a party does, his act should be so manifestly consistent with, and indicative of, an intent to voluntarily relinquish the particular right or advantage that no other  reasonable explanation of his conduct is possible. Considering the terms of the quitclaim executed by the President of private respondent, the tenor of the document does not lead to the purported conclusion that he intended to renounce private respondent’s beneficial title over its share in the Manila xxx xxx
Polo Club. We, therefore, find no reversible error in the respondent Court’s holding that private respondent, AmCham, is the beneficial owner of the share in dispute. Turning now to the second issue, the petitioner contends that the Articles of Incorporation and Bylaws of Manila Polo Club prohibit corporate membership. However, private respondent does not insist nor intend to transfer the club membership in its name but rather to its designated nominee. For as properly ruled by the Court of Appeals: “The matter prayed for does not involve the transfer of said share to the appellant, an artificial person. The transfer sought is to the appellant’s nominee. Even if the MPC By-Laws and Articles prohibit corporate membership, there would be no violation of said prohibition for the appellant’s nominee to whom the said share is sought to be transferred would certainly be a natural person. x x x As to whether or not the transfer of said share to the appellant’s nominee would be disapproved by the MPC, is a matter that should be raised at the proper time, which is only if such transfer is disapproved by  the MPC.” The Manila Polo Club does not necessarily prohibit the transfer of proprietary shares by its members. The Club only restricts membership to deserving applicants in accordance with its rules, when the amended Articles of Incorporation states that: “No transfer shall be valid except between the parties, and shall be registered in the Membership Book unless made in accordance with these Articles and the  By-Laws”. Thus, as between parties herein, there is no question that a transfer is feasible. Moreover, authority granted to a corporation to regulate the transfer of its stock does not empower it to restrict the right of a stockholder to transfer his shares, but merely authorizes the adoption of regulations as to the  formalities and procedure to be followed in effecting transfer. In this case, the petitioner was the nominee of the private respondent to hold the share and enjoy the privileges of the club. But upon the expiration of petitioner’s employment as officer and consultant of AmCham, the incentives that go with the position, including use of the MPC share, also ceased to exist. It now behooves petitioner to surrender said share to private respondent’s next nominee, another natural person. Obviously this arrangement of trust and confidence cannot be defeated by the petitioner’s citation of the MPC rules to shield his untenable position, without doing violence to basic tenets of justice and fair dealing. However, we still have to ascertain whether the rights of herein parties to the trust still subsist. It has been held that so long as there has been no denial or repudiation of the trust, the possession of the trustee of an express and continuing trust is presumed to be that of the beneficiary, and the statute of  limitations does not run between them. With regard to a constructive or a resulting trust, the statute of limitations does not begin to run until the trustee clearly repudiates or disavows the trust and such  disavowal is brought home to the other party, “cestui que trust”. The statute of limitations runs generally from the time when the act was done by which the party became chargeable as a trustee by  operation of law or when the beneficiary knew that he had a cause of action, in the absence of fraud or concealment. Noteworthy in the instant case, there was no declared or explicit repudiation of the trust existing between the parties. Such repudiation could only be inferred as evident when the petitioner showed his intent to appropriate the MPC share for himself. Specifically, this happened when he requested to retain the MPC share upon his reimbursing the purchase price of P110,000, a request denied promptly by private respondent. Eventually, petitioner refused to surrender the share despite the written demand of private respondent. This act could then be construed as repudiation of the trust. The statute of limitation could start to set in at this point in time. But private respondent took immediate positive action. Thus, on May 15, 1990, private respondent filed an action to recover the MPC share. Between the time of implicit repudiation of the trust on October 9, 1989, as evidenced by petitioner’s letter of said date, and private respondent’s institution of the action to recover the MPC share on May 15, 1990, only about seven
1976. et al . the above-mentioned lot was mortgaged with the GSIS. Emilio Villahermosa. 1981. that believing that she is the only heir of Filomena.00 with the trial court but the defendants. as the owner of the other one-half (1/2) share. Herminia began to possess the other half of the subject property and the house erected thereon in 1976 until the defendants disturbed her peaceful possession by claiming the undivided one-half of the property on the basis of a deed of sale dated July 28. refused to accept the amount deposited insisting that their father had bought the entire lot from Filomena Lariosa. that plaintiffs offered the defendants what their father might have paid if they could prove that there was such a sale made by Filomena Lariosa to Emilio Villahermosa.00 thus obtaining the release of the mortgage and the certificate of title. As correctly held by the respondent court. 1994. considering that their other sister. Paulina Lariosa Villahermosa and mother of the defendants. Our laws on the matter provide that actions to recover movables shall prescribe eight  years from the time the possession thereof is lost. Since the private respondent filed the necessary action on time and the defense of good faith is not available to the petitioner. is AFFIRMED. Natividad. petitioner has the obligation to transfer now said share to the nominee of private respondent. Villahermosa. she paid the balance of Filomena’s GSIS loan in the total sum of P848.-36311 entitled Spouses Jose C. as Filomena needed funds for the construction of her house. 77-A of the subdivision plan (LRC) Psd 35298. and Jesus.000. Rosario and Herminia L. being a portion of Lot 77 of the Talisay-Minglanilla Estate. Rosario and Herminia Lariosa-Rosario (petitioners herein) filed an action for legal redemption with damages and attorney’s fees against Lourdes. Defendants (private respondents herein) filed their answer denying the material allegations of the complaint and interposing the following affirmative defenses: that the complaint states no cause of action. selling the subject lot 77-A for a consideration of THREE HUNDRED EIGHTY PESOS (P380. Aida. there is no basis for any purported claim of prescription. The Decision of the Court of Appeals of May 19. had predeceased Filomena. that Herminia is the registered owner of one-half (1/2) undivided share of a parcel of land designated as Lot No. the defendants stubbornly insisted that they would take possession of the property. R-20861. Lourdes L. Spouses Jose C. all surnamed Villahermosa. which will entitle petitioner to ownership of the disputed share. WHEREFORE. which reversed the decision of the Regional Trial Court of Cebu in Civil Case No. 1976 allegedly executed by Filomena in favor of their father. before the Regional Trial Court of Cebu. the plaintiffs sought the aid of the barangay for an amicable settlement and offered to redeem the ½ portion of the subject lot. after repudiation of the trust. but the settlement failed.00) and to guarantee the payment thereof. she had not completely paid her GSIS loan and since Herminia feared that the mortgage might be foreclosed to the prejudice of her ½ undivided share. COSTS against petitioner. 12326 of the Registry of Deed of Cebu Province. thus. On August 25. however. hence plaintiffs deposited the amount of P380. Rodulfo. CA In this petition for review on certiorari. petitioners Spouses Jose and Herminia Rosario seek a  reversal of the decision dated June 14. she obtained a loan from the Government Service Insurance System (GSIS) in the amount of Seven Thousand Pesos (P7. Rosario vs. through their lawyer. 1996 of the Court of Appeals in CA-G. SO ORDERED. Rosario v. the latter became a co-signer of the promissory note and other documents pertinent to said loan. CV No. unless the possessor has acquired the ownership by  prescription for a less period of four years if in good faith.00). the Petition for Review on Certiorari is DENIED. that sometime in April 1965.months had lapsed.R. alleging that they are husband and wife. single. with Filomena Lariosa. that there exists an express or implied trust between plaintiffs and Filomena and the latter with . Cebu  City . as shown by Transfer Certificate of Title No. that when Filomena died on October 9. that since Herminia is a co-owner thereof.
12326. each co-owner having a one half (1/2) undivided share. to be returned to the Villahermosas before her death.” The trial court found that the subject lot (lot no.000. (the mother of Filomena. to which request Spouses Villahermosas agreed. that the subject lot 77-A was originally a part of lot 77 which belonged to defendan ts’ deceased parents. the title cannot be the subject of a collateral attack. the Regional Trial Court of Cebu. After trial. which was transferred to Rodolfo Villahermosa. although defendants tried to show that the subject lot was only held in trust by Filomena Lariosa in favor of their parents. that the validity of this title has not been assailed by the defendants (private respondents herein). to enable Filomena to comply with the GSIS requirement and accordingly. and as such the title remains valid and stands as conclusive proof of ownership of the subject lot. Rosario as the real and absolute owner of the entire of Lot No.00. Branch 6. 77 as her place of residence for a consideration of P380. 1976. subject to the condition that the said lot would be held in trust by Filomena to be returned to the Villahermosas before her death. executed a simulated Deed of Sale over an undivided one-half portion of Lot No. was subdivided into Lot 77-A with 372 square meters. which argument cannot be deemed a modification of the matters stated in the torrens title. belonged to Filomena Lariosa and Herminia Rosario. lot no. through the intercession of Maxima Lariosa. 77-A in favor of the plaintiff Herminia Rosario who thereafter co-signed with Filomena the GSIS loan and executed a mortgage over Lot No. Costs against the defendants. Filomena. 1963 and sometime in the early part of 1964. thus Filomena was allowed to use the ½ portion of Lot No.000.00 as moral damages. that since GSIS further required a co-signer for the loan. without any consideration and for the purpose of complying with GSIS requirements. however no formal deed was actually executed. Filomena requested the heirs of her sister Paulina to formalize the sale of one-half of the property. the dispositive portion of which reads as follows: “WHEREFORE. declares the plaintiff Herminia L. that out of the GSIS loan. that Paulina Lariosa Villahermosa (defendants’ mother) died on February 12. the ½ undivided share of the plaintiffs spouses Herminia and Jose Rosario was merely held in trust. and who after full payment was issued TCT No. all for the benefit of principal borrower and trustor. and Lot 77-B with 373 square meters. Filomena. Filomena wanted to demolish the old house standing on Lot No. Paulina and petitioner Herminia and grandmother of the defendants) a request was made that Filomena be allowed to occupy ½ of lot No. orders the defendants to execute a deed of conveyance transferring their rights over the one-half undivided share of Lot 77-A in favor of plaintiffs Herminia L. Filomena returned the lot and allowed the Villahermosas to buy back the lot for the same amount of P380. 1258 on February 28. Filomena could have sold only the ½ undivided portion of the subject lot to Emilio considering that the other ½ undivided portion belonged .00 was actually received by the Villahermosas.the defendants. The court concluded that since co-ownership between Filomena Lariosa and Herminia Rosario had been established. 77-A in favor of the GSIS and under such arrangement. which originally contained SEVEN HUNDRED FORTY-FIVE (745) SQUARE METERS.  1991. Rosario and Jose Rosario and orders the defendants to pay the plaintiffs P2. this Court hereby orders the defendants to accept t he payment of P380. 1950. Cebu City rendered its decision on May 27. Filomena was able to build a house on Lot No. but since the GSIS required that the land on which the house to be erected should be mortgaged as collateral. although the sum of P380. married to Emilio Villahermosa.00 as attorney’s fees. Emilio and his children (heirs of Paulina Lariosa) executed a deed of sale over one-half of Lot No.00 for the purchase price of the lot. 77. 12326. which was transferred to Filomena Lariosa. that acknowledging the “arrangement” that the lot would be held in trust by Filomena to be returned to the Villahermosas before her death. that sometime in 1950. 77-A of the Talisay-Minglanilla estate covered by TCT No. Villahermosa. 77-A until her death on October 9. 77-A) as evidenced by TCT No. 77 as her residence. who purchased the same by installment from the Bureau of Lands. 77-A and since 1965 Filomena solely exercised ownership over the house and Lot No. 1976 and in compliance with the previous trust arrangement between Filomena and Emilio Villahermosa and his children. 77 and build a new house on the site with GSIS funding. and P1. Paulina L. 77.00 through a Deed of Sale dated July 28.
considering that both parties to the alleged Deed of Sale were both deceased at the time of the trial. its findings of fact being conclusive as a matter of general principle.” The basic question that needs to be addressed is (1) whether there is an implied trust that existed between Emilio Villahermosa and Filomena Lariosa over the subject property. Petitioners contend that there was no implied trust between Filomena Lariosa and Emilio Villahermosa and that petitioner Herminia Rosario had no way of knowing if there was any agreement for Filomena to return the subject property to Emilio and could not have refuted the execution and contents of the Deed of Sale dated July 28. Moreover. 1976 and the admission made by respondent Lourdes Villahermosa that Filomena was under the doctor’s care for several months. particularly plaintiff Herminia Rosario.1976 as  valid and subsisting. that notwithstanding the fact that Herminia did not question the execution of the controverted deed of sale in any action thus admitting the fact of execution. and Herminia as the registered co-owner has the right to exercise legal redemption under Article 1620 of the Civil Code considering that Emilio is a “third person”. and (2) whether an implied trust also existed between Filomena Lariosa and petitioner Herminia Rosario for the benefit of the Villahermosas. Defendants (private respondents herein) appealed to the respondent court which reversed the lower court’s finding. 1976 executed by Filomena selling back the subject property to Emilio since she had no way of verifying whether the document was authentic and true from an independent source other than the Villahermosas. It is well-settled that the jurisdiction of this court in cases brought to it from the Court of Appeals by way of petition for review under Rule 45.to Herminia Rosario. and a new one entered DISMISSING the complaint and recognizing the Deed of Sale dated July 28. when Herminia Rosario acquired the 1/2 interest on the . Whether or not plaintiffs. the following is the dispositive portion of the judgment: “WHEREFORE. is limited to reviewing or revising errors of law imputed to  it. that there are circumstances appearing on record which rendered the Deed of Sale questionable such as (1) the proximity of the alleged date of execution of the deed of sale with that of the death of Filomena on October 9. the judgment appealed from is REVERSED and SET ASIDE. Petitioners have appealed to this court raising the following issues: “Whether or not respondents and their late father are “strangers” within the contemplation of Article 1620 of the Civil Code. thus indicating that said conveyance was tainted with irregularity. and (2) Emilio was only forced to present their deed of sale to Herminia when the latter presented her title over the property. Whether or not an implied trust under Article 1453 of the Civil Code existed between the late Filomena Lariosa in favor of the respondents and their late father. premises considered. Herminia was not furnished a writen notice of such sale nor a copy of the deed of sale. Costs against the plaintiffs-appellees. we have  to rule on such factual issue as an exception to the general rule. complied with the thirty (30) day period provided under Article 1623 of the Civil Code. since in the instant case there is a conflict between the factual findings of the trial court and the respondent court. However. not being one of the registered co-owners. thus Herminia’s right to exercise legal redemption never began to run and had not yet expired when she tendered payment to the Villahermosas of the redemption price and subsequently consigned the amount in court in 1981. such admission does not include the truth and veracity of the contents of said document since the only fact which can be said as admitted for the purpose of exercising the right of redemption was the conveyance of the property but not extraneous matters such as the supposed reason for the sale.
and that private respondents’ ownership of the subject land is not by sale but by succession. or will. by some writing or deed. 1980. Petitioner filed their reply contending that private respondents’ argument that petitioners’ right of redemption over the subject lot was non-existent and was exercised on the wrong parties cannot be valid because private respondents as heirs of Emilio Villahermosa acquired only such rights as the said predecessor had over the subject property which in this case is subject to petitioners’ right to re deem the property. petitioners note that although the decision of the respondent court recognizes the validity of the deed of sale between Filomena Lariosa and Emilio Villahermosa. returned the subject lot to Emilio Villahermosa. We find no merit in this petition.subject lot and the title was made in her and Filomena’s names. Implied trusts are those which without being express. Finally. her right to legal redemption still subsists. since petitioners were never given any written notice of the sale of Filomena to Emilio as required under Article 1623 of the Civil Code. and redemption is thus unavailing. are deducible from the nature of the transaction as matters of intent. and yet Herminia allowed four (4) years to lapse before she commenced the present action for legal redemption. thus the absolute ownership over the subject property was reposed only in the registered owners to the exclusion of any other person including Emilio Villahermosa. Hence Emilio would be considered as a “third person” so that even if Emilio Villahermosa and private respondents are co-heirs and co-owners of the other properties left behind by Filomena Lariosa. thus the 30. independently of the particular intention of the . the same can only pertain to ½ portion of the lot 77-A since petitioner Herminia is the registered co-owner of the other ½ of lot 77-A. it will not affect the fact that neither Emilio nor the private respondents are registered co-owners of lot 77-A and Herminia can exercise her right of legal redemption. It is contended that the right of redemption must be exercised by the redemptioner during the lifetime of the seller (Filomena Lariosa) and buyer (Emilio Villahermosa. private respondents allege that the grounds relied upon by petitioner in this petition for review which are (1) that Emilio Villahermosa is not a “third party” contemplated under Art. hence not subject to any redemption right. before her death.. petitioner Herminia was never aware of the alleged implied trust between Filomena and Emilio Villahermosa. the 30-day period within which petitioners should exercise their right of legal redemption never commenced to run so that when petitioner Herminia commenced this action with the trial court. Finally. Sr. hence redemption is not applicable. Even assuming redemption is available. 5 years from the time petitioner had actual knowledge of the sale of the subject lot to Emilio Villahermosa who had already died on December 24. or by words  evidencing an intention to create a trust. assuming redemption is proper. In their comment. that petitioners were never furnished a written notice of the sale by the vendor nor a copy of the Deed of sale nor had they directly participated in the transaction to give them actual knowledge of the sale. 1981.day period to redeem did not commence to run at the time this action was filed. or which are superinduced on the transaction by operation of law as a matter of equity. the written notice required under Article 1623 was complied with because petitioner Herminia admitted during the trial that she learned for the first time in 1977 of the existence of the deed of sale. private respondents contend that they are not parties to the documents hence the wrong parties are being sued. the same is already moot and academic because the alleged redemption was made only on May 12. 1620 and (2) that petitioner Herminia Rosario exercised her right of redemption within the 30-day reglementary period. are all moot and academic in view of the proven fact that trust was fully established and accomplished when Filomena.). Sr. Trust  relations between parties may either be express or implied. Trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property. Express trusts are those which are created by the direct and positive acts of the parties. the equitable ownership of the former entitling  him to the performance of certain duties and the exercise of certain powers by the latter. as they are the legitimate children of the deceased Emilio Villahermosa. Finally.
constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. premised on the promise or commitment of the latter to return to the former Lot No. They arise contrary to intention against one who. This is why it was her parents (Paulina and Emilio) who bought the lot after continuing to pay for it to the Bureau of Lands.). pp. obtains or hold  the legal right to property which he ought not. on the one hand. by executing a Deed of Sale (Exhibit `9’ or `O’). or convey it to another or to the grantor.. Mother Paulina died in 1963 (TSN. When her Aunt Filomena applied for a GSIS loan. Aunti Filomena lived with her mother (grandmother Maxima) in that old house until she decided to build a new one (TSN. As found by the respondent court: “The alleged existence of a TRUST between the parties is allegedly based on the agreement between the defendants’ predecessor-in-interest. It was the plaintiff. in equity and good conscience. and for and in consideration of the sum of THREE HUNDRED EIGHTY  . 9-10 and 14-15. After a review of the evidence on record. Maxima Lariosa. 77 was subdivided upon request of her late aunt Filomena who wanted to build a house on the lot. the late spouses Emilio Villahermosa and Paulina Lariosa Villahermosa. as shown by TCT No. Ibid. title to which was transferred to her upon her request. thus. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. 1985). one in favor of their aunt (Exhibit `8’ or `L’). Anyway. 7-8. brothers and sisters) all agreed to her aunt’s request on the condition that when she (Aunt Filomena) no longer needs it. pp. Ibid. Rosario. about their a unt’s request. who volunteered. Where a lot was taken by a person under an agreement to hold it for. duress or abuse of confidence. before her Aunt Filomena died in October 1976. where it is explicitly stated: `That in compliance with the VENDOR’S solemn promise to return or to sell back to the VENDEE Lot No.). so she assigned her rights (Exhibit `2’) to Paulina (defendants’ mother). October 23. 77 was formerly owned by her parents. Emilio Villahermosa. To get a loan from the GSIS. to hold. Actually. brothers and sisters). a resulting or implied trust arises in favor of the person for whose benefit the  property was intended . and the late Filomena Lariosa on the other. it was necessary that the lot should be a guaranty for the loan. A for her aunt and B for her brother. This was testified to by defendant Lourdes Villahermosa. who attested on the following facts: Lot No. to enable her to use it for a housing loan with the GSIS.parties. Her grandmother Maxima asked Paulina (defendant’s mother) to buy the land because she felt insecure while living in it. had been occupying it and were (sic) the one paying for it with the Bureau of Lands. 1258 issued in their names (Exhibit `3’) and consisting of 745 square meters. by fraud. There were two Deeds of Sale executed by them (her father. Lot No. 2224. They (her father. pp. Herminia L. Grandmother Maxima died in 1958. 9-10). we hold that a trust was indeed created between Filomena. And since her brother Rodolfo was also contemplating to build his office/home. 19. pp. Grandmother Maxima continued to live in the old house located on the said lot. her father called all the defendants. 1985). Thus. both coming into being by operation of law. Implied trusts may either be resulting or constructive trusts. and had it titled in their names (TSN. Sept. 77-A. she will return the lot to them ( Ibid. 10-15. but she could no longer pay. she returned the lot to her father. So she (Aunt Filomena) asked her father (Emilio) to get (have) part of the lot. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. Rodolfo (Exhibit `7’ or `M’). since their mother was already dead. On the other hand. she (Filomena) was just a temporary public school teacher newly transferred from Negros. Thus. Emilio Villahermosa and his children when lot 77-A was transferred in the name of Filomena. her grandmother. she (Filomena) was required to have a co-maker who is a permanent employee of the MECS. 77-A (SEVENTY-SEVEN-A). the lot was subdivided into Lots 77-A and 77B. being a permanent teacher of the Talisay Elementary School and also a member of the GSIS (pp. a nd the other in favor of her brother.
their filing of a case for legal redemption is a recognition of the validity of the transfer made. 77-A in favor of Filomena Lariosa in order to enable the latter build a house thereon with a GSIS loan. in view of Filomena’s declared intention to hold the lot for them and her promise to return it back to Emilio and private respondents. with an area of THREE HUNDRED SEVENTY-TWO (372) SQUARE METERS. b) The plaintiffs never contested the authenticity or genuineness of the Deed of Sale (Exhibit `9’ or `O’). and the glaring fact that the 1964 sale was only for the lot.00). an implied if not express trust was created in favor of the original registered owners of the subject lot. 77-A. Municipality of Talisay. his heirs and assigns said RESIDENTIAL LOT NO. c) The circumstances narrated by Lourdes Villahermosa were never refuted or controverted by the plaintiffs with any rebuttal evidence. In view thereof. the parties’ agreement to subdivide Lot No.PESOS ONLY (P380. in fact. there is an implied trust in favor of the person whose benefit is contemplated. the receipt whereof is hereby acknowledged by the VENDOR. We find these declarations indicative of an implied trust between Filomena and Emilio. many of the material facts narrated by Lourdes were also testified to by Herminia such as the origins and history of Lot No. 1976 precisely pursuant to the trust agreed upon. 77. whereas the 1976 sale includes all the improvements thereon.00 is the same amount which was paid by Filomena to her father (Lourdes’s) in 1965 (TSN. etc. Emilio Villahermosa.” . to wit: `When property is conveyed to a person in reliance upon his declared intention to hold it for. p. as contemplated in Article 1453 of the Civil Code of the Philippines. or transfer it to another or to the grantor. Philippines. Philippine Currency. of the subdivision Plan (LRC) Psd-35298. On the contrary. d) The consideration of P380.” When Emilio Villahermosa and his children. and which lot is more particularly described in Transfer Certificate of Title No. they are deemed to have admitted its due execution as well as the facts stated therein. the transfer made to Filomena was with the declared intention to hold the lot for. together with all the improvements thereon. said VENDOR does by these present sells (sic). albeit purportedly subject to legal redemption (which We shall discuss separately). Province of Cebu. the requirements for the GSIS loan.00 for the 1964 sale from Emilio to Filomena in 1964 was not increased by any single centavo despite the time difference of twelve (12) years when the lot was resold to the former in 1976. 1985). 77-A (SEVENTY-SEVEN-A). or to transfer it back to Emilio. On the contrary. before her death. returned the lot with its improvements by virtue of the Deed of Sale dated July 28. 11614 (ELEVEN THOUSAND SIX HUNDRED FOURTEEN) as follows: x x x’ The amount of P380. the respondents herein conveyed Lot No. This is an indication that the deed was really executed in compliance with the promise made by Filomena in 1964 to return or resell the property to the Villahermosas. Filomena. it stated that the sale was “in compliance with the vendor’s solemn promise to return or sell back to the vendee lot No. transfers (sic) and conveys (sic) to the VENDEE herein. 77 into two.’ In the instant case. situated in the Poblacion. 17. the need for a co-borrower for Filomena’s loan. as shown by the following circumstances: a) The opening paragraph of the Deed of Sale as quoted above is indicative of the intention of the parties. together with his children. September 19. more or less.
We rule in the affirmative. nor did she assume the burden of ownership. the GSIS required that the land title should be mortgaged as collateral. Herminia admitted that she never paid the taxes on the  subject lot during Filomena’s lifetime as this was paid exclusively by Filomena Lariosa.The next question is whether such trust in favor of Emilio and his heirs (private respondents) is effective or binding upon petitioner Herminia Rosario who is the registered co-owner of the subject Lot No. Emilio Villahermosa and any other person would be considered a “third person”. the new house was constructed on the middle of the subject lot without any objection  on the part of petitioners and Herminia Rosario never demanded for a separation or partition of their  respective shares despite the fact that Herminia purportedly owns the ½ portion of the subject lot. . 1964 executed between Filomena Lariosa and Herminia Rosario was merely for the purpose of facilitating and expediting the approval of Filomena’s loan with the GSIS for the construction of Filomena’s new house on the subject lot. The execution of the deed of sale dated July 28. Filomena Lariosa executed a Deed of Sale on December 3. the borrower’s experience as teacher and her  salary were also considered. Since Filomena Lariosa was only a temporary teacher at the time she  decided to obtain a loan from the GSIS to finance the construction of her house. It was established that the subject property was only held by Filomena in trust for Emilio and private respondents. 77-A) by obtaining a loan from the GSIS. for the price  of P100. 1964. hence an absolutely simulated contract of sale. In addition to the title requirement. 1976. petitioner Herminia has the right to redeem the property. Herminia Rosario never exercised her alleged right of a co-ownership over the subject lot. It was shown that sometime in 1964. Filomena Lariosa requested Emilio Villahermosa and his heirs (private respondents herein) to execute a Deed of Sale transferring lot 77-A in her favor. Filomena Lariosa applied for the loan and petitioner Herminia Rosario was made a cosigner on the promissory note and other documents pertinent to Filomena’s GSIS loan. who was a permanent school teacher.00. Herminia was not aware of such alleged existing implied trust. It is petitioner’s theory that when the title to the subject property was registered solely in the name of Filomena Lariosa in 1964 under TCT No. 1964 over the ½ portion of subject property in favor of her sister. petitioner Herminia Lariosa Rosario. We are not persuaded by petitioners’ argument. . thus. These circumstances unmistakably show that the sale of the ½ portion of the subject lot by Filomena Lariosa to Herminia Rosario and the transfer of the title in both the names of Filomena and Herminia was for the purpose of obtaining the GSIS loan. Notably. however. 11614. there was already a conveyance and transfer of ownership to Filomena from Emilio and private respondents so that when petitioner Herminia acquired the one-half interest over the subject property and registration thereof was made in the names of both Filomena Lariosa and Herminia Rosario. thus. not being a co-owner. 77-A pursuant to the deed of sale executed by Filomena in favor of Herminia on December 3. We sustain private respondents’ allegation that the deed of sale dated December 3. and the subsequent deed of sale of Filomena to Emilio Villahermosa was an affirmation of such intention. that when Filomena Lariosa conveyed the property to Emilio Villahermosa in 1976. The proven circumstances clearly demonstrated that the Deed of Sale in favor of Herminia was a mere accommodation arrangement. Filomena Lariosa wanted to build a new house on the subject lot (lot no. and the Deed of Sale was executed on June 6. 1976 by Filomena Lariosa in favor of Emilio categorically stated that it was in compliance with the vendor’s solemn promise to return or to sell back the entire lot 77-A with all its improvements thereon to Emilio Villahermosa and Filomena never mentioned the name of petitioner Herminia as her co-owner. Thereafter the loan was approved and the house of Filomena was constructed on the subject lot. the same being borne out by the evidence. 1620. Moreover. confirming that the sale made by Filomena to Herminia was never intended to result in a real transfer of ownership. 1964. undisputed is the fact that the physical possession of both the house and the subject lot remained through the years with Filomena Lariosa until her death on October 9. hence the absolute ownership over the property was then reposed only in Filomena Lariosa and Herminia Rosario and under Art.
in equity and good conscience. 12326 registered in the names of both Filomena and Herminia Rosario and said to be conclusive as to all matters contained therein. Nueva That: “A constructive trust. an involuntary trust. produces no legal effects. 77-A. against one who. And specifically applicable to the case at bar is the doctrine that ‘A constructive trust is substantially an appropriate remedy against unjust enrichment. RTC. It is raised by equity in respect of property. the torrens system of registration can confirm or record nothing. which has been acquired by fraud. concealment. although in business or social relations. Where one does not have any rightful claim over a real property. it is against equity that it should be retained by the person holding it. or questionable means.  This Court has ruled in the case of Sumaoang vs. It is raised by equity to satisfy the demands of justice. The right of legal redemption among co-owners presupposes the existence of a co-ownership. Co-ownership is the right of common dominion which two or more persons have in a spiritual part of thing which is not physically  divided.The cumulative effect of the evidence on record as narrated identified badges of simulation showing that the sale of the ½ portion of the subject lot made by Filomena to Herminia was not intended to have a legal effect between them. rests on the principles of the general law on trust which. Ecija. It  does not protect a usurper from the true owner. artifice. The torrens system does not create or vest title. actual or constructive. It does not permit one to enrich himself at the expense of another. or who in any way against equity and good conscience. XXXI. by fraud. a trust de son tort. in accordance with its fundamental principles and the traditional exercise of its jurisdiction or in accordance with statutory provision. other statutes and the Rules of Court. Petitioner had never become a co-owner of the lot No. did not operate to vest upon petitioners’ the ownership over the ½ portion of lot 77 -A considering the above-mentioned circumstances surrounding the issuance of such title. have been adopted or incorporated into our civil law. rendering an acquisition or retention of property by one person unconscionable against another. Guimba. which is not present in the instant case. raises a constructive trust.  1976 . and does not convey property rights nor in any way alter  the juridical situation of the parties. Judge. when Filomena returned or sold back the property to Emilio Villahermosa by virtue of a Deed of Sale dated July 28. either has obtained or holds the legal right to property which he ought not. no right of legal redemption accrued in favor of petitioner Herminia. to the extent that such principles are not inconsistent with the Civil Code.’ .  Filomena Lariosa. Article 1620 which grants such right to a co-owner applies only when the co-ownership of  an undivided thing or right belongs to different person. a trust ex delicto. However. by commission of wrong. by duress or abuse of confidence. through Article 1442 of the Civil Code . The conclusion we reach. It only confirms and records title already existing and vested. As such it is void and is not susceptible of   ratification. takes cognizance. a constructive trust does not arise on every moral wrong in acquiring or holding property or on every abuse of confidence in business or other affairs. It cannot be a shield for the commission of fraud. otherwise known as a trust ex maleficio. It has been broadly ruled that a breach of confidence. The fact that the title to the subject lot was issued in 1965 under TCT No. or where although acquired originally without fraud. is a trust by operation of law which arises contrary to intention and in invitum. When petitioner Herminia obtained the registration of the ½ share of the subject lot by virtue of a simulated deed of sale it impressed upon the title a constructive trust in favor of the true party. or by any form of unconscionable conduct. said parties having entered into a sale transaction by which they did not intend to be legally bound. ordinarily such a trust arises and will be declared only on wrongful acquisitions or retentions of property of which equity. or an implied trust. Petitioner Herminia and Filomena never became co-owners of the subject land since the sale which transpired between them was only simulated. finding constuctive trust under Article 1447 of the New Civil Code existing between Filomena and Herminia. . hold and enjoy. Br.
Alexander died of leukemia on May 19. we may draw freely upon American precedents in determining the effects of trusts. The beneficiary is entitled to enforce the trust notwithstanding the irrevocability of the torrens title.00. WHEREFORE. In  the words of Judge Cardozo. “(S)ince the law of trust has been more frequently applied in England and in the United States than it has been in Spain. especially so because the trust known to American and English equity jurisprudence are derived from the fidei commissa of the Roman Law and are based  entirely upon civil law principles. Ty vs CA Case Digest THE INTESTATE ESTATE OF ALEXANDER T. . On November 4.xxx” A constructive trust is created by a court of equity as a means  of affording relief. Privite respondent Alejandro Ty then filed two complaints for the recovery of the above-mentioned property. HON. petitioner Silvia. and only child. In particular. Guggenheim Exploration Co. represented by the Administratrix. morality.560. “(w)hen property has been acquired in such circumstances t hat the holder of the legal title may not in good conscience retain the beneficial interest. ty. ILDEFONSO E. praying for the recovery of the pieces of property that were placed in the name of deceased Alexander. And since We are a court of law and of equity. Codes of Commerce. respondents G. As the respondent court said. on January 11. in Beatty vs. Ty was married to Alexander T. SYLVIA S.The above principle is not in conflict with the New Civil Code.” Since the sale was a simulated conveyance of real property. the petition for review is DENIED and the questioned decision of the respondent Court of Appeals is AFFIRMED. Ty. fraud on the part of the person holding or detaining the property at stake is not essential in order that an implied trust may spring into being. the vendee. VS. they were acquired through privaterespondent’s money. conscience and fair dealing and thus protect the innocent against fraud. 1981. petitioner. son of private respondent Alejandro b. The torrens  system was not intended to foment betrayal in the performance of a trust. they may well be applied in our jurisdiction. praying for the declaration of nullity of the deed of absolute sale of the shares of stock executed by private respondent in favor of the deceased Alexander. TY.R. SO ORDERED. Krizia Katrina. the case at bar must be resolved on the general principles of law on constructive trust which basically rest on equitable considerations in order to satisfy the demands of justice. 2001 FACTS: Petitioner Sylvia S. 1988 and was survived by his wife. GASCON. acquired no title thereto and she merely became a trustee of the ½ portion of the subject property for the benefit of its real owner Filomena who held the entire property in trust for the Villahermosas. 1992.. petitioner was appointed administratrix of her late husband’s intestate estate. COURT OF APPEALS. and ALEJANDRO B. In the settlement of his estate. equity converts him into a trustee. Herminia. premises considered. TY. Rules of court and special laws.714. petitioner filed a motion for leave to sell or mortgage estate property in order to generate funds for the payment of deficiency estate taxes in the sum of P4.” Although the citations in the above-mentioned case originated from American jurisprudence. “It behooves upon the court s to shield fiduciary relations against every manner of chicanery or detestable design cloaked by legal technicalities. No. Ty. Constructive trust constitutes a remedial device “through which preference of  self is made subordinate to loyalty to others. 112872 April 19. without any cause or consideration from deceased Alexander.
We disagree.R. The petition for review on certiorari in G.R. No. 2002 JOSUE ARLEGUI vs. constructive trusts do not only arise out of fraud or duress. in order to satisfy the demands of justice. nor was he unjustly enriched. J. and that petitioner’s subsequent acts betrayed the trust and confidence reposed on him. It is further argued that no implied trust. 15 was leased for more than 20 years by Serafia Real Estate. contributed money to enable the officers to negotiate with the Barrettos. Barretto Enterprises for the purchase of the apartment units. but also by abuse of confidence. Josue Arlegui was elected vice president and Mateo Tan Lu as auditor of the association. 114672 is DENIED. Arlegui demanded Genguyons to vacate the premises. which were also dismissed for lack of merit.: FACTS: Residential Apartment Unit no.B. to spouses Gil and Beatriz. No. 112872 is DISMISSED. Such transfer having been effected without cause of consideration.HON. YNARES-SANTIAGO. They were then informed that Mateo Tan sold the apartment to Josue Arlegui. the . the petition for certiorari in G. having failed to show that grave abuse of discretion was committed in declaring that the regional trial court had jurisdiction over the case. Genguyons continued to occupy the premises and paid rentals. Besides. The tenants formed an organization called Barretto Apartment Tenant Association to represent them in negotiations with A. Thus. The petitioner also argues that the Genguyons’ failed to prove the existence of an implied or constructive trust. WHEREFORE. 126437 March 6. However. He neither received money from the Genguyons. Inc. Nevertheless.The motions to dismiss were denied. Barretto. RULING: Private respondent contends that the pieces of property were transferred in the name of the deceased Alexander for the purpose of taking care of the property for him and his siblings.B. that Serfia and its assets had already been assigned and transferred to A. COURT OF APPEALS and SPOUSES GIL AND BEATRIZ GENGUYON. having found no reversible error was committed. G. along with the other tenants and members of the association. the records show that the Genguyons. a resulting trust was created. the present petitions now before the Court.R. Alberto Barretto (one of the owners of Serafia) informed the tenants of the apartment bldg. ISSUE: Whether or not a constructive trust existed HELD: The petitioner denies that a constructive trust was created and maintains that there was no fraud committed. In 1984. ISSUE: Whether or not an express trust was created by private respondent when he transferred the property to his son. There is ample documentary and testimonial evidence to establish the existence of a fiduciary relationship between them. Petitioner then filed petitions for certiorari in the Courts of Appeals. as defined under Article 1456 of the New Civil Code. was created because the petitioner did not acquire the subject property through mistake or fraud. Genguyons were later surprised to learn that the unit they were leasing had been sold to Mateo Tan Lu.
120. Counsel for petitioner did not comply with this order. Nenita  Sanchez. and Felipe Sanchez. On 12 February 1998. Petitioner claimed that she did not affix her signature on the document and subsequently refused to vacate the lot. in accordance with its fundamental principles and the traditional exercise of its jurisdiction or in accordance with statutory provision. otherwise known as a trust ex maleficio. On 4 November 1999 or a year later. the trial court affirmed the 27 July 1998 decision of the MeTC. or who in any way against equity and good conscience. the MeTC issued an order for the issuance of a writ of execution in favor of private respondent Virginia Teria. It is raised by equity to satisfy the demands of justice.absence of fraud or mistake on the part of the petitioner does not prevent the court from ruling that an implied or constructive trust was created nonetheless. 289216 in the name of private respondent Virginia Teria by  virtue of a Deed of Absolute Sale supposed to have been executed on 23 June 1995 by all six (6) co owners in her favor. which ordered the parties to file their respective memoranda of appeal. Petitioner then elevated her appeal to the Regional Trial Court of Caloocan City. a Notice to Vacate was served by the sheriff upon petitioner who however refused to heed the Notice. against one who. It has been broadly ruled that a breach of confidence. by commission of wrong. subsequently assigned to Br. rendering an acquisition or retention of property by one person unconscionable against another. an involuntary trust. the lot was registered under TCT No. or an implied trust. 49 of Caloocan City ruled in favor of private respondent declaring that the sale was valid only to the extent of 5/6 of the lot and the other 1/6 remaining as the property of petitioner. artifice. petitioner. On 4 November 1998. nor even inform her of the developments in her case. A constructive trust. On 20 February 1995. thus prompting private respondent Virginia Teria to file an action for recovery of possession of the aforesaid lot with the Metropolitan Trial Court (MeTC) of Caloocan City sometime in September 1995. in equity and good conscience. is a trust by operation of law which arises contrary to intention and in invitum. On 28 April 1999 private respondent started demolishing petitioner’s house without any special permit of demolition from the court. or by any form of unconscionable conduct. Marilyn Sanchez married to Nicanor Montalban. CA This is a Special Civil Action for Certiorari under Rule 65 of the Rules of Court to annul and set aside the Decision of the Court of Appeals dated 23 May 2001 as well as its Resolution dated 8 January 2002 in CA-G. SP No. although in business or social relations. the MeTC-Br. concealment. However.R. SC annulled the sale of the apartment and ordered Arlegui to execute deed of conveyance to Genguyon spouses Sanchez v. ordinarily such a trust arises and will be declared only on wrongful acquisitions or retentions of property of which equity. on account of her signature in the Deed of Absolute Sale having been established as a forgery. widow. 263624 with the following co-owners: Eliseo Sanchez married to Celia Sanchez. buyer of the property. . 49 of that court. hold and enjoy. *There was a breach of trust by the officers. a constructive trust does not arise on every moral wrong in acquiring or holding property or on every abuse of confidence in business or other affairs. by duress or abuse of confidence. either has obtained or holds the legal right to property which he ought not. 59182. subsequently raffled to Br. by fraud. Susana Sanchez married to Fernando Ramos. a trust de son tort. actual or constructive. The lot was registered under TCT No. constructed a house on a 76-square meter lot owned by her parents-inlaw. Petitioner not having filed any pleading with the RTC of Caloocan City. a trust ex delicto. Lilia Sanchez. or questionable means. single. takes cognizance. raises a constructive trust. Lilian Sanchez.
which would result in technicalities that tend to .  speedy and inexpensive disposition of every action or proceeding. On 29 October 1999 petitioner filed her Petition for Relief from Judgment with the RTC on the ground that she was not bound by the inaction of her counsel who failed to submit petitioner’s appeal memorandum. The rationale for this approach is explained in Ginete v. as much as  possible. board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction.Due to the demolition of her house which continued until 24 May 1999 petitioner was forced to inhabit the portion of the premises that used to serve as the house’s toilet and laundry area. Where the issuance of the extraordinary writ is also within the competence of the Court of Appeals or the Regional Trial Court. just and inexpensive determination of the cases before them. The only issue in this case is whether the Court of Appeals committed grave abuse of discretion in dismissing the challenged case before it. the original jurisdiction of this Court to issue the so-called extraordinary writs should generally be exercised relative to actions or proceedings before the Court of Appeals or before constitutional or other tribunals or agencies the acts of which for some reason or other are not controllable by the Court of Appeals. The Rules of Court should be liberally construed in order to promote their object of securing a just. be decided on their merits and not on mere technicalities. the negligence of petitioner’s counsel cannot be deemed as negligence of petitioner herself in the case at bar. The rules of procedure should be viewed as mere tools designed to aid the courts in the speedy. Under the peculiar circumstances of this case. speedy and adequate remedy in the ordinary course of law. Liberal construction of the rules and the  pleadings is the controlling principle to effect substantial justice. This prerogative to relax procedural rules of the most mandatory character in terms of compliance. this Court must be convinced thoroughly that two (2) grounds exist before it gives due course to a certiorari petition under Rule 65: (a) The tribunal. On 14 June 2000 petitioner filed her Petition for Certiorari with the Court of Appeals alleging grave abuse of discretion on the part of the court a quo. However. Despite the procedural lapses present in this case. On 23 May 2001 the appellate court dismissed the petition for lack of merit. Hence. Verily. A notice to a lawyer who appears to have been unconscionably irresponsible cannot be  considered as notice to his client. and (b) There is no appeal nor any plain. Their strict and rigid application. Litigations should. it is either of these courts that the specific action for the procurement of the writ must be presented. On 18 June 2001 petitioner filed a Motion for Reconsideration but the Court of Appeals denied the motion in its Resolution of 8 January 2002. it appears from the records that counsel was negligent in not adequately protecting his client’s interest. we are giving due course to this petition as there are matters that require immediate resolution on the merits to effect substantial justice. Court of Appeals  This Court may suspend its own rules or exempt a particular case from its operation where the appellate court failed to obtain jurisdiction over the case owing to appellant’s failure to perfect an appeal. with more reason would this Court suspend its own rules in cases where the appellate court has already obtained jurisdiction over the appealed case. such as the period to appeal has been invoked and granted in a considerable number of cases x x x x Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. However the RTC denied the Petition and the subsequent Motion for Reconsideration. As a matter of policy. which necessarily calls for a liberal construction of the Rules.
as we are now constrained to do in the instant case x x x x The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just determination of his cause. and. It would then be easy for one lawyer to sell one’s rights down the river. which instead of being exercised by the owner in an exclusive manner over the things subject to it. (c) the recognition of ideal shares. Hence. free from the constraints of technicalities.frustrate rather than promote substantial justice. not materially or physically divided. which determines the  rights and obligations of the co-owners. (b) the merits of the case. Certiorari should therefore be granted to cure this grave abuse of discretion. one should not insist that a notice to such irresponsible lawyer is also a notice to his clients. Tiongco  we held: There should be no dispute regarding the doctrine that normally notice to counsel is notice to parties. and that such doctrine has beneficent effects upon the prompt dispensation of justice. liberty. we now look into the merits of the petition. Aside from matters of life. honor or property which would warrant the suspension of the Rules of the most mandatory character and an examination and review by the appellate court of the lower court’s findings of fact. Manresa defines it as the “manifestation of the private right of ownership. (c) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules. The suspension of the Rules is warranted in this case since the procedural infirmity was not entirely attributable to the fault or negligence of petitioner. is exercised by two or more owners and the undivided  thing or right to which it refers is one and the same. Whether established by law or by agreement of the co-owners. Its application to a given case. Sanchez Roman defines co-ownership as “the right of common dominion which two or more  persons have in a spiritual part of a thing. In co-ownership. the notion of co-ownership was not sufficiently dealt with. by just alleging that he just forgot every process of the court affecting his clients. dangerous collusions to the detriment of justice. (d) a lack of any showing that the review sought is merely frivolous and dilatory. the other elements that should be considered are the following: (a) the existence of special or compelling circumstances. this Court has consistently held that rules must not be applied rigidly so as not to override substantial justice. however. who are the co-owners. substantial justice requires that we go into the merits of the case to resolve the present controversy that was brought about by the absence of any partition agreement among the parties who were co-owners of the subject lot in question. because he was so busy. should be looked into and adopted. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself has already declared to be final.” The characteristics of co-ownership are: (a) plurality of subjects. it might foster. Time and again. giving due course to the instant petition shall put an end to the dispute on the property held in common. We attempt to address this controversy in the interest of substantial justice. according to the surrounding circumstances. Throughout the  proceedings from the MeTC to the Court of Appeals. and (e) the other party will not be  unjustly prejudiced thereby. Besides. Even the Rules of Court reflect this principle. and which is the element which binds the subjects. the property or thing held . the relationship of such co-owner to the other co-owners is fiduciary in character and attribute. which means that there is a single object which is not materially divided. This case overlooks a basic yet significant principle of civil law: co-ownership. otherwise. must always be eschewed. in the court’s desire to make a short-cut of the proceedings. Under this circumstance. In People’s Homesite and Housing Corporation v. wittingly or unwittingly. Thus. (b) unity of or material indivision.
The Deed of Absolute Sale by the other co-owners to Virginia Teria shall be RESPECTED insofar as the other undivided 5/6 portion of the property is concerned. the Court takes this occasion to apply the principles of implied trust. specific or determinate part of the thing owned in common because his right over the thing is  represented by a quota or ideal portion without any physical adjudication. All that the co-owner has is an ideal or abstract quota or proportionate share  in the entire land or thing. He may validly lease his undivided interest to a  third party independently of the other co-owners. Caloocan City to effect the aforementioned survey and partition. As she was not a party to the Deed of Absolute Sale voluntarily entered into by the other co-owners. SP No. in view of the foregoing. The Decision of the Court of Appeals dated 23 May 2001 as well as its Resolution dated 8 January 2002 in CA-G. The dispositive  portion of the assailed Decision reads: “WHEREFORE. As an exception to the general rule barring factual reviews in petitions under Rule 45.pro-indiviso is impressed with a fiducial nature so that each co-owner becomes a trustee for the benefit  of his co-owners and he may not do any act prejudicial to the interest of his co-owners.R. i. the legal effect of an agreement to preserve the properties in co-ownership is to create an express trust among the heirs as co-owners of the properties. SO ORDERED. 1992 and its Resolution promulgated on May 5. Let the records of this case be REMANDED to MeTC-Br. 29781  promulgated on October 15. Tigno v. Partition needs to be effected to protect her right to her definite share and determine the boundaries of her property. Before the partition of a land or thing held in common. CA In denying this petition. WHEREFORE. the Court wades into the transcript of stenographic notes only to find that the Court of Appeals. But he has no right to sell or alienate a concrete. no individual or co-owner can claim title to any definite portion thereof. Although assigned an aliquot but abstract part of the property. 289216 (formerly TCT No.. the metes and bounds of petition er’s lot has not been designated. Thus. Co-ownership is a form of trust and every  co-owner is a trustee for the others. A survey of the questioned lot with TCT No. correctly overturned the trial court’s findings of facts. his undivided interest. the decision appealed from is hereby REVERSED and another one ENTERED as follows:   . indeed.R. 1993. The Case Petitioners challenge the Decision of Respondent Court of Appeals in CA-G. 49. CV No. as well as segregate the 1/6 portion appertaining to petitioner Lilia Sanchez. her right to 1/6 of the property must be respected. the Petition is GRANTED.e. 263624) by a duly licensed geodetic engineer and the PARTITION of the aforesaid lot are ORDERED. 59182 is ANNULLED and SET ASIDE. Article 493 of the Civil Code gives the owner of an undivided interest in the property the right to freely sell and dispose of it. Such partition must be done without prejudice to the rights of private respondent Virginia Teria as buyer of the 5/6 portion of the lot under dispute.
Pangasinan. With costs against defendants-appellees. Declaring the Deed of Sale executed by defendant-appellee Rodolfo M. Lingayen. C) Sometime in April 1980. B) Heirs of Isaac Sison (i. Pangasinan. more or less. 5. namely: Manuel Sison. The Facts Respondent Court adequately recited the facts of the case as follows:  “The facts from the standpoint of plaintiff-appellant’s (herein private respondent’s) evidence are summarized in his brief. Tigno to vacate the parcels of land described in the complaint and surrender possession thereof to plaintiff-appellant Eduardo M. Ordering defendant-appellee Rodolfo M. and on the West by Path. to wit: ‘Sometime in January.’ (Exh. on the East by alley. bounded on the North by Padilla Street. and 3. 1989.. Sept. Remedios Sison and the heirs of Isaac Sison. bounded on the North by Padilla Street. Tigno as the true and lawful owner of the lands described in the complaint. situated at Padilla Street. Tigno. bounded on the North by Padilla Street. Gerardo Sison and Adelaida Sison appointed Dominador Cruz as agent to sell three (3) parcels of land adjoining each other located at Padilla St.66 square meters. 6-8). on the East by Path. with an area of 3006. 1980. and on the West by Alejandro Vinluan and Thomas Caldito.’ (Exh. 1108. herein appellant (TSN. containing an area of 3006. Lingayen. pp. he approached Cruz and told the latter to offer these parcels of land to his brother. more or less. 5. Rodolfo Tigno learned that the abovedescribed properties were for sale. and on the West by Mariano Sison. on the South by Dionisio and Domingo Sison.’ (Exh.1. Accordingly. on the East by Alley. Eduardo Tigno. Manuel. with an area of 3006. p. Pangasinan. Declaring plaintiff-appellant Eduardo M.” Petitioners’ subsequent motion for reconsideration was “denied for lack of merit” in the assailed  Resolution. Lingayen. Bienvenido Sison. 1989.66 square meters. on the South by Lots 1105. A) Remedios Sison ‘A parcel of unirrigated riceland (now fishpond) situated in Poblacion. On the South by Bienvenido Sison. 1107. 1106. 2. Lingayen. Sept. more or less. Pangasinan (TSN. .e. Tigno in favor of defendant-appellee spouses Edualino Casipit and Avelina Estrada as null and void and of no effect.. These parcels of land belonging to the abovenamed persons are more particularly described as follows: Bienvenido Sison: ‘A parcel of fishpond situated at Padilla Street.67 square meters. etc. 9). Gerardo and Adelaida Sison) ‘A parcel of fishpond.
000. but upon Rodolfo Tigno’s prodding. it was agreed that each parcel of land would cost Ten Thousand Pesos (P10. it was learned that Bienvenido Sison failed to bring the tax declarations relating to his property. After leaving Manila City Hall.00) representing the following: a) P15. 1980. In view thereof. Cruz brought and showed these deeds of sale to appellant in his Makati office.00 as the balance for the three (3) parcels of land. 16 -23). the agent in the sale. 1980. Manuel Sison. Sept. B-1 and C-1). Lingayen. At the Manila City Hall. pp. Manuel. despite the fact that no deed of sale was prepared by Atty. Manuel’s house. p. pp. On May 6. 1989.000. pp.000. 15). A. B. Bienvenido Sison and Manuel Sison asked appellant to pay a fifty percent (50%) downpayment for the properties.000. Cruz and Rodolfo Tigno went to appellant’s Makati office to convince the latter to buy the properties earlier described. Cruz and Rodolfo Tigno intimated to Epifanio Tigno that appellant has agreed to buy the 3 parcels of land abovedescribed (TSN. Manuel and signed by Bienvenido Sison. p. Rodolfo Tigno was named as ‘vendee’ pursuant to the verbal instruction of herein appellant. After giving the downpayment. as he will be there to attend the town fiesta (TSN. pp. Manuel to place the name of Rodolfo Tigno as ‘vendee’ in the deeds of sale to be subsequently prepared. Pangasinan. Manuel Sison did not have a Special Power of Attorney from his sister in the United States of America to evidence her consent to the sale. Sept. Cruz and Rodolfo Tigno left for Lingayen. 16. After leaving appellant’s office. The latter acceded to the request and gave Five Thousand Pesos (P5. 1980 and June 12. 5. 1989. May 12. the appropriate deeds of sale (Exhs. 13). the abovenamed persons and appellant went to Atty. Lingayen. 1989. At Atty. Cruz. Sometime in the second week of July 1980. Cruz. Sept. 1980. At first. This was witnessed by Cruz and Atty. This instruction was given to enable Rodolfo Tigno to mortgage these properties at the Philippine National Bank (PNB). 5. C) were finally prepared by Atty. p. On May 2. 9]. pp. appellant instructed Cruz and Atty. p. Pangasinan (TSN. the heirs of Isaac Sison (Manuel. At around 5:00 o’ clock in the afternoon. 1989. appellant was finally convinced to buy them (TSN. Remedios Sison had mortgaged her property to a certain Mr. 5. Pangasinan on May 2. Sept. 5. which mortgage was then existent. 1980. pp. appellant was reluctant. 5. 5.Pursuant thereto. for appropriate funds needed for the development of these parcels of land as ‘fishponds’ (TSN. Cruz and Rodolfo Tigno went to Manila City Hall to visit the latter’s uncle. together with Bienvenido Sison. Oct. Also. 1920). Sept.000. Having reached an agreement of sale. Epifanio Tigno. 19.00) each to the 3 abovenamed persons for a total of Fifteen Thousand Pesos (P15. who works there.00) [TSN. 1989. 1989. 8-10). appellant gave Cruz a Pacific Bank check in the amount of Twenty Six Thousand Pesos (P26. Sept. Manuel. Tuliao. and Remedios Sison. 1989. Gerardo and Adelaida Sison). 9-11). Remedios Sison. Adelaida Sison and Remedios Sison went to appellant’s house at Guilig Street. Sept. Lingayen Branch. A-2. Lingayen. appellant then instructed Cruz to bring the owners of these parcels of land to his ancestral house at Guilig Street. signed in these three (3) deeds of sale as a witness (Exhs. 1989. Pangasinan for the preparation of the appropriate deeds of sale (TSN. In that meeting between Cruz and appellant at the latter’s office. In all these deeds of sale. 29. 27. However. Sept. TSN. Sept.00) (TSN. no deed of sale was prepared on that day (TSN. 1989. After seeing these documents. 1989. Further. 5. 17-19). . respectively. 15-17). Modesto Manuel’s house at Defensores West Street.
Upon encashment of this check at PNB. p.000. 1989. 29-32). not knowing that the sale was already consummated as early as April 29. 1989. The plaintiff further averred in said Complaint that some time on May 16. without the knowledge and consent of appellant. pp. 3941). and not Rodolfo Tigno. appellant confronted the Casipits and Rodolfo Tigno and asked them to annul the sale. Oct. the former instructed the Notary Public. Recovery of Possession and Damages’ against Rodolfo M. Tigno and defendant spouses Edualino Casipit and Avelina Estrada.56 square meters. 16. A few days thereafter. 16. E). is the real owner of said lands. that plaintiff purchased the three (3) parcels of land in question so that his brother Rodolfo Tigno. Cruz paid Remedios Sison. secure a loan from the PNB without need of plaintiff’s signature and personal presence. Metro Manila.56 square meters to his co-defendant spouses who had previous knowledge that plaintiff. 30-31. On April 29. could have a source of income as a caretaker of the fishponds. when he was in Lingayen. Tigno was the vendee so that the latter could. sold to Spouses Edualino Casipit and Avelina Casipit 508. plaintiff found out upon verification with the Register of Deeds of Lingayen. Annulment of Document. 1989. Tigno became the absolute and exclusive owner of the parcels of land having purchased the same after complying with all legal requirements for a valid transfer and that in selling a portion thereof to his co-defendants. by way of special and affirmative defense. The complaint alleged. Nov. 5. (TSN. that Rodolfo had already sold on April 29. 1989. but his request was not heeded (TSN. upon learning that the sale was already consummated. and after confronting Rodolfo himself. then as executive vice-president of an American firm based in Makati. that plaintiff and Rodolfo agreed that the latter would secure a loan from the Philippine National Bank at Lingayen using said lands as collateral. rollo) On May 24.000. the Casipits were aware that the portion of the land they bought was owned by appellant. through Adelaida Sison. pp. the loan proceeds to be used as seed capital for the fishponds. who prepared the Deeds of Sale. 12-B to 12-j. D) to the Casipits advising them to desist from the intended sale. On May 16.56 square meters of the land previously owned by Bienvenido Sison (Exh. it was made to appear in the deeds of sale that Rodolfo M. the plaintiff filed Civil Case No. that Rodolfo M. that considering the busy schedule of plaintiff. 1989 said portion of 508. that after requesting in writing the defendant-spouses to desist from buying the land. to put in said Deeds the name of Rodolfo M. appellant sent a letter (Exh. Pangasinan. 1989. Lingayen Branch. Accordingly. among others. he was merely . and c) P5. 1989. that there being a violation of trust and confidence by defendant Rodolfo. Manuel Sison and Bienvenido Sison.00 for capital gains tax. Sept. 1989. registration and other incidental expense. 16673 for ‘Reconveyance. pp.b) P6. the balance due them from appellant (TSN. appellant learned that Rodolfo Tigno is ‘negotiating’ a portion of his land to the Casipits. 1989. In their Answer (pp. pp. TSN. that there being trust and confidence as brothers between plaintiff and defendant. 8-11. 5. but all the demands were unjustifiably refused. Oct. At the time of sale.’ (pp. plaintiff demanded from said defendants the reconveyance of said lands. 10). 1989. 6. records). 1989. Sept. not Rodolfo Tigno (TSN. the surrender of the possession thereof to him and the cancellation of the Deed of Sale of said portion of 508. Rodolfo Tigno. defendants denied the material allegations of the complaint and alleged. he came to know from friends that Rodolfo was negotiating the sale to defendant spouses of a portion of one of the parcels of land. as he actually did. Tigno as vendee.00 representing Cruz’s commission as agent. 42-43). who was then jobless.
this Court ordinarily passes upon questions of law only. contrary to the decision of the Court of Appeals II Documents and circumstances substantiate ownership of petitioner Rodolfo Tigno III No fiduciary relationship existed between Petitioner Rodolfo Tigno and Private Respondent Eduardo Tigno” The main issue is whether the evidence on record proves the existence of an implied trust between Petitioner Rodolfo Tigno and Private Respondent Eduardo Tigno. In petitions for review under Rule 45. The Court’s Ruling The petition has no merit. Ordering the plaintiff to pay the defendants the sum of three thousand (P3. However. in the light of the facts and circumstances discussed above.000. the trial court dismissed the complaint and disposed as follows:   “Wherefore. Hence. Ordering the dismissal of the plaintiff’s complaint for lack of basis in fact a nd in law. in the present case. and that defendant spouses Casipit acquired the portion of 508. this Court decided to take up and rule on such factual issue. there is a conflict between the factual findings of the trial court and those of the Respondent Court. The Issues Petitioners raise the following issues:  “I Evidence of record definitely show that the receipts of payments of Petitioner Rodolfo Tigno for the fishponds in question are authenticated. Respondent Court reversed the trial court. An implied trust arises where a person purchases land with his own money and takes conveyance thereof in the name of . relying upon the validity of the vendor’s ownership. 1. as an exception to the general rule. 2. independently of the particular intention of the parties.exercising his right to dispose as owner. A corollary question is whether Petitioners Edualino and Evelyn Casipit are purchasers in good faith and for value of a portion of the lots allegedly held in trust and whether they may thus acquire ownership over the said property. this petition for review. Hence. First Issue: Was an Implied Trust Created? Implied trusts are those which are deducible by operation of law from the nature of the transaction  as matters of equity.” As earlier stated.56 square meters in good faith and for value.” After trial on the merits. the court hereby renders judgment against the plaintiff and in favor of the defendants.00) pesos as atty’s fees and further to pay the costs of the proceedings.
Jr. implied trusts are either resulting or constructive trusts. However. and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. while the latter is the beneficiary. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. Davide. it is essential that there be: 1. but from the facts and circumstances. it is a relationship of fiduciary character. which reads: Art. In such a case. In turn. by fraud. To give rise to a purchase money resulting trust. it arises as a result of a manifestation of intention to create the relationship. it involves the existence of equitable duties imposed upon the holder of the title to the property to deal with it for the benefit of another. 4. 1448. obtains or holds the legal right to property which he ought not. or an equivalent. They arise contrary to intention against one who.. et al. Express trusts are created by the intention of the trustor or of  the parties. et al. the trust results because of equity and it arises by implication  or operation of law. property or services. in Morales. legitimate or illegitimate. through the learned Mr. It is a relationship. constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase  money resulting trust. an actual payment of money. the property is held on resulting trust in favor of the one furnishing the consideration for the transfer. constituting valuable consideration. if the person to whom the title is conveyed is a child. Court of  Appeals.  Trusts are either express or implied. .another. that is to say. The characteristics of a trust are: 1. The former is the trustee. and 5. 3. 2. not one involving merely personal duties. Justice Hilario G. The trust is created in order to effectuate what the law presumes to have been the intention of the parties in the circumstances that the person to whom the land was conveyed holds it  as trustee for the person who supplied the purchase money. the equitable ownership of the former entitling  him to the performance of certain duties and the exercise of certain powers by the latter. while implied trusts come into being by operation of law. There is an implied trust when property is sold. in equity and good  conscience. On the other hand. to hold. vs. The species of implied trust raised by private respondent was extensively discussed by the Court. duress or abuse of confidence. it being disputably presumed that there is a gift in favor of the child. A resulting trust is exemplified by Article 1448 of the Civil Code. unless a different intention or understanding appears. of the one paying the price of the sale. The trust which results under such circumstances does not arise from a contract or an agreement of the parties.: “A trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property. it is a relationship with respect to property. no trust is implied by law.
G.)” In this petition. an “instrumental witness. 1447. 73651. and such consideration must be furnished by the alleged beneficiary of a resulting trust. 75336. the burden of proving the existence of a trust is on the party asserting its existence. 155 SCRA 689 . a trust does not result. No.  There are recognized exceptions to the establishment of an implied resulting trust. contrary to the findings of Respondent Court. They contend that.” Hence. G. While implied  trusts may be proved by oral evidence. is that the document executed by Remedios Sison? ATTY. In other words. this Court in some instances did away with the irrevocability or indefeasibility of a certificate of title to prevent injustice against the rightful owner of the property. and such  proof must be clear and satisfactorily show the existence of the trust and its elements. VIRAY That is only a xerox copy. IAC. Witness Dominador Cruz did not authenticate the genuineness of Exhibit “ATTY. the presumption being that a gift was intended.R. Trustworthy evidence is required because oral evidence can easily be fabricated. In Chiao Liong Tan vs. New Civil Code) Thus. The first is stated in the last part of Article 1448 itself. where A pays the purchase money and title is conveyed by absolute deed to A’s child or to a person to whom A stands in loco parentis and who makes no express promise. No. equivocal or indefinite  declarations. For all practical purposes. IAC. petitioners deny that an implied trust was constituted between the brothers Rodolfo  and Eduardo. their Exhibit 16 and  Exhibit 17 were fully authenticated by Dominador Cruz. we object.R. No. A trust. that in which an actual contrary intention is proved. G. such presumption is rebuttable by competent proof. although no specific provision could be cited to apply to the parties herein. The New Civil Code recognizes cases of implied trust other than those enumerated therein.2. we ruled:  “A certificate of registration of a motor vehicle in one’s name indeed creates a strong presumption of ownership. . Also where the purchase is made in violation of an existing statute and in evasion of its express provision. he should not be allowed to vary the plain content of the two documents indicating that Rodolfo Tigno was the vendee. it is undeniable that an implied trust was created when the certificate of registration of the motor vehicle was placed in the name of petitioner although the price thereof was not paid by him but by private respondent. The principle that a trustee who puts a certificate of registration in his name cannot repudiate the trust by relying on the registration is one of the well-known limitations upon a title. L33261. 154 SCRA 403 . Cardiente v. Court of Appeals. Another exception is. no trust can result in favor of the party who  is guilty of the fraud. Amerol v. As a rule. of course. the evidence must be trustworthy and received by the courts with extreme caution. the person in whose favor it has been issued is virtually the owner thereof unless proved otherwise. Your Honor. Bagumbayan. 1980 signed by Remedios Sison. (fn: Bornales v.R. and should not be made to rest on loose. BERMUDEZ: As Exhibit ‘16’ dated June 12. 16:  We are not persuaded. (fn: Art. Even under the Torrens System of land registration. does not lose that character simply because of what appears in a legal document. which derives its strength from the confidence one reposes on another especially between brothers. 166 SCRA 524 . Thus.
ATTY. BERMUDEZ At any rate there was a receipt, is this the receipt? A Maybe this or maybe not, sir.
ATTY. BERMUDEZ Q I am showing to you another document, which we respectfully request that the same be marked as Exhibit ‘17.’” In any event, these two exhibits are proof merely of the receipt of money by the seller; they do not  show that Rodolfo paid the balance of the purchase price. On the other hand, Witness Dominador Cruz was unshakable in testifying that Private Respondent Eduardo, though not named in the receipts or in  the deeds of sale, was definitely the real buyer: “COURT: (The Court will ask few questions.) Q Do you know if there [is] a document executed between the brothers to show the real vendee in these three deeds of absolute sale is Eduardo Tigno? A I don’t know of any document because according to Eduardo Tigno it will be placed in the name of his brother, Rodolfo Tigno so that it can be used as collateral.
COURT: Q Being the agent of this transaction did you not try to advice Eduardo Tigno to be safe for him a document will have to be executed showing that he is really the vendee? A I also explained that matter to him I know that matter to happen in the long run they will have dispute but Eduardo Tigno said he is his brother, he have [sic] trust and confidence in his brother, sir.
COURT: Q When did you give that advice? A Before the preparation of the documents, sir.
Q Do you know already that it will be in the name of Rofolfo [sic] Tigno before the execution? A Yes, sir. During the time we have conversation on May 2, 1980, he instructed me to place the name of Rodolfo Tigno in the document, Atty. Manuel was present when he gave that advice, sir.
COURT Q What did Atty. Manuel advised [sic]? A The reason for [sic] Eduardo Tigno have trust and confidence on his elder brother, Rodolfo Tigno.
COURT: (Propounding questions) Q So there is nothing written that will show that the money or purchase price came from Eduardo Tigno, is that correct? A None, sir. It’s by trust and confidence,
Q Considering that you know that the money came from Eduardo Tigno, why did you consent that the deed of absolute sale in the name of Rodolfo Tigno and not Eduardo Tigno?
Because Atty. Manuel called for Rodolfo Tigno because the document was in the name of Rodolfo Tigno, sir.
Q The document is already defective, why did you not ask the preparation of the document to be executed by Rodolfo Tigno accordingly that the real owner who sold to you is the brother, Eduardo Tigno? A I did not think of it, what I know is that the real owner is Eduardo Tigno, sir, and has the power to disposed.
COURT: Q Eduardo Tigno is the real owner, why did you agree that Rodolfo Tigno to execute the document? A Yes, sir. Atty. Manuel called for Rodolfo Tigno so I consented.”
Aside from the “trust and confidence” reposed in him by his brother, Petitioner Rodolfo was named as vendee in the deeds of sale to facilitate the loan and mortgage the brothers were applying for to rehabilitate the fishponds. Be it remembered that private respondent was a Makati-based business executive who had no time to follow up the loan application at the PNB branch in Lingayen, Pangasinan and, at the same time, to tend the fish farm on a daily basis. Atty. Modesto Manuel, who prepared and notarized the deeds of sale, unhesitatingly affirmed the unwritten agreement between the two  brothers: “ATTY. VIRAY: Will you please tell the Court what is the reason, if ever there was, why the plaintiff, Eduardo Tigno, instructed you to put the name of Rodolfo Tigno as vendee in the papers? ATTY. BERMUDEZ: We object, Your Honor. The best witness to that is the plaintiff, Your Honor. COURT: Q Do you know the reason why Eduardo Tigno requested you to place the name of his brother as vendee? WITNESS: A Eduardo Tigno requested me to place the name of his brother as vendee so that the brother can use the lands as collateral for possible loan at the PNB (Philippine National Bank), sir.
COURT: Go ahead. ATTY. VIRAY: Q When was that when the plaintiff instructed you to place the name of his brother, the defendant, Rodolfo Tigno as vendee in the documents so that the defendant, Rodolfo Tigno, could use the properties as collateral for possible loan to the PNB? WITNESS: A It was sometimes during a fiesta in Guilig when Eduardo Tigno and Dominador Cruz, I think that was May 2, 1980, when Eduardo Tigno and Dominador Cruz and some of the vendors went to my house and they requested me to prepare the deeds of sale, sir.”
In his direct examination, Atty. Manuel convincingly explained why Petitioner Rodolfo was  named as vendee: “ATTY. VIRAY: Q When the plaintiff Eduardo Tigno instructed you to place the name of his brother as the vendee in the deeds of sale you were to prepare, what did you tell him or did you give any advice? A Yes, sir. I certainly did, sir.
Q What advice? A Why will I put the name of your brother as vendee when you were here as real buyer who will give the money to the vendors? Why not you, I told him, sir.
Q What else did you tell him? A I remember he is to make Special Power of Attorney in order his brother (sic) will execute the loan to the PNB, sir.
Q What did the plaintiff, Eduardo Tigno, tell you when you said it would be best to execute the Special Power of Attorney instead of placing the name directly in the deeds of sale, what is his answer? A He acceded to my advised [sic], sir. All right, make the deeds of sale, he said, agreeable to the deed of sale to my advised but when I told him that It would take the document probably by the middle of June, he back [sic] out, sir, because he told me he is going abroad and he may not be around and then he instructed me to place the name of his brother as the vendee not the plaintiff anymore, sir.
Q In other words, Mr. Witness, at first he was agreeable and that he would execute Special Power of Attorney? A Yes, sir.
Q Since he was going to the United States and he could not wait the preparation of the documents he just instructed you to go ahead with the first instruction, is that what you mean, Mr. Witness? A Yes, sir.” (Underscoring supplied.)
This testimony of Atty. Manuel was corroborated by Dominador Cruz who was the real estate agent cum witness in all three deeds of sale. As a witness, he pointed out that Petitioner Rodolfo was named as  the vendee in the deeds of sale upon the order of private respondent: “ATTY. VIRAY: Q When you said Atty. Manuel was not able to prepare the deed of sale on May 2, 1980, what then happened in the house of Atty. Manuel? A When Atty. Manuel was not able to prepare the document, my cousins wanted to get advance payment, one half of ten thousand pesos, sir, each.
ATTY. VIRAY: Q Did Eduardo Tigno agreed [sic] to the request of your cousins to get one half of the price of their land? A He agreed to give five thousand pesos each but he prepared temporary receipt fpr [sic] five thousand pesos, sir.
Failing to convince petitioners to annul the sale. Failing to find his brother. 1989 or five (5) days after learning from Edualino of the  consummation of the sale. no delay may be attributed to private respondent.” From the foregoing. what else happened? A When the three of us. Before the institution of this case. On May 18. 1989 addressed to the Casipits advising them to desist from buying the property because he was the real owner. Q You mean to say five thousand pesos for each parcel of land? A Yes. herein private respondent. sir. he immediately wrote a letter dated May 16. only to learn that the sale had already been  consummated as early as April 29. private respondent had no reason to sue. We agree with the detailed disquisitions of the Court of Appeals on this point:  . Q By the way. Atty. the proceeds will be used in the development of the fishpond. I heard Eduardo Tigno said to Attyl. sir. Manuel. how much all in all did Eduardo Tigno give on May 2.N. sir. Indeed. 1989. 1989. Rodolfo because we will mortgage the land with the P. he filed this case after only five days from learning of the infidelity of his brother. Manuel and Eduardo Tigno were talking. the probative value.00. Q After the plaintiff. are not conclusive  evidence of ownership. Eduardo Tigno paid the advanced payment for five thousand pesos for each parcel of land. he confronted Petitioner Edualino Casipit about the impending sale. Q By the way.B. private  respondent instituted this case on May 24. Contrary to petitioners’ insistence.. In the face of the credible and straightforward testimony of the two witnesses. 1980 as advanced consideration? A P15.000. He requested that the buyer of the fishpond will be placed in the name of the brother of Eduardo Tigno. Q Who is that brother of Eduardo Tigno? A xxx xxx Rodolfo Tigno. of the tax declarations being in the name of Petitioner Rodolfo is utterly minimal to show ownership. if any. xxx Q How about the balance of the purchase price of the property. no delay may be imputed to private respondent. [sic] Manuel that the deed of sale will be placed in the name of my brother.Q Who prepared the receipt? A Atty. is there any instruction made by Eduardo Tigno with respect to the payment thereof? A With respect to the balance after the preparation of the document they will bring it to Eduardo Tigno for him to pay the balance. Clearly. was the deed of sale to these parcels of land finally executed? A Yes. it is clear that the name of Rodolfo Tigno appeared in the deeds of sale not for the purpose of transferring ownership to him but only to enable him to hold the property in trust for his brother. When private respondent went to Pangasinan to pay the taxes on his property in Bugallon. sir. Cruz and Manuel. by themselves. I. he learned from his relatives that his brother was negotiating the sale of a portion of the fishponds to Spouses Casipit. sir. Suffice it to say that these documents.
563 ). Court of Appeals. Firstly. 500. 1980. a resulting or implied trust arises in favor of the person for whose benefit the property was intended. Since defendant Rodolfo is named as vendee in the Deeds of Sale. the only reason why defendant Rodolfo was made to appear as the buyer in the Deeds of Sale was to facilitate their mortgage with the PNB Branch at Lingayen to generate seed capital for the fishponds. as has thus been fully established. 1987. 1980. “could validly  transfer the ownership of a portion” to Spouses Casipit. et al. There is an implied trust when property is sold. the property is held on a resulting trust in favor of the one furnishing the consideration for the transfer. Petitioners argue that Rodolfo Tigno “had exercised all the acts of dominion and ownership over the fishponds in question. Feb. v. where property is taken by a person under an agreement to hold it for or convey it to another or the grantor. 1448. aside from the fact that plaintiff was to travel abroad for thirty (30) days sometime in June.” as nobody “shared in the produce of the fishponds for the past nine (9) years. and on the Tax Declarations and Tax payment receipts in his name. We firmly reject these contentions and need only to cite Respondent Court’s incisive findings: “After a careful examination of the evidence on record. which provides: ‘Art. Petitioner Rodolfo.’ An implied trust arises where a person purchases land with his own money and takes conveyance thereof in the name of another. p. L-47378. (Lim vs. as the Deeds of Sale were not yet prepared on May 2. xxx xxx xxx ‘It is also the rule that an implied trust arises where a person purchases land with his own money and takes a conveyance thereof in the name of another. the Supreme Court elucidated on implied trust: ‘The trust alleged to have been created in our opinion. must inevitably yield to the clear and positive evidence of plaintiff. et al. The former is the trustee. mainly relying on the Deeds of Sale where defendant Rodolfo’s name appears as vendee. and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. Cited in II Regalado REMEDIAL LAW COMPENDIUM. In such a case. With Rodolfo’s name as vendee. Romero. he could not have executed a Special Power of Attorney in favor of Rodolfo. we hold that an implied trust was created in favor of the plaintiff [private respondent herein] within the meaning of Article 1448 of the Civil Code. the property is held on a resulting trust in favor of the one furnishing the consideration for the transfer. by this Court in the case of Martinez v. et al. while the latter is the beneficiary. it is only natural that Tax Declarations and the corresponding tax payment receipts be in his name so as to effect payment thereof.“The trial court’s conclusion that defendant-appellee is the true buyer and owner of the lands in question.. As held. In such case. 65 SCRA 160) In the earlier case of Heirs of Candelaria. his name was put as vendee in view of the mutural [sic] trust and confidence existing between said parties who are brothers. Secondly. unless a different intention or understanding appears. in effect. x x x. and cases cited therein.. is a n implied trust. Moreover. “being the real purchaser” of the parcels of land. 35). Griño (42 Phil. to enable Rodolfo to mortgage the lands. there would be no need anymore for the personal presence of plaintiff-appellant who was very busy with his work in Manila.” Petitioners contend that there was no “fiduciary relationship” created between the brothers Tigno. 27. out of which Rodolfo could derive income. CA. Thus. unless a different intention or . 109 Phil.” Therefore. it is well-settled that the tax declarations or the payments of real estate taxes on the land are not conclusive evidence of ownership of the declarant or payor (De Guzman v.
700..’ xxx xxx xxx On the other hand.79 in 1980 alone. 5. That plaintiff was able to pay these amounts is believable. thus: ‘Art. Lingayen. Sept. registration and other incidental expenses.000.00 each. 1457. Manuel. Trusts are either express or implied. pp. Later. where he received P311. Statutes. P6.00 for capital gains tax. Sept. he gave a check to Dominador Cruz.00 as the balance for the three (3) parcels of land.000. because plaintiff had the financial means to pay said amounts. Tigno is merely a trustee constituted over said lands on behalf of plaintiff. p. Inc. Implied trust come into being by operation of law.. At the time of the sale in 1980. It must be noted that Article 1441 of the Civil Code defines both express trust and implied trust in general terms.000. as shown by his Certificate of Income Tax Withheld on Wages for said year (Exhibit G for plaintiff). one of which is described under Article 1448 quoted heretofore. what happened there?  .00.” Indeed. (Alcantara.00 representing Cruz’s commission as agent . indeed. under the rule generalia specialibus non derogant. that is to say. 1989. 1989. 1989. it prevails over and qualifies Article 1441. which was witnessed by Dominador Cruz and Atty. 42-43). Therefore.000. as first installment. oral evidence is admissible to establish a trust  relation between the Tigno brothers.’ We disagree with the trial court’s ruling that if. 1441. Since Article 1448 is a specific provision. Smith Phil. VIRAY Q When you said Dominador Cruz was able to bring the vendors at Guilig street. 19-20). When this check was encashed. It was established thru plaintiff’s testimony that plaintiff paid P5. (TSN. since this case involves an implied trust falling under Article 1448. The trust which results under such circumstances does not arise from contract or agreement on the parties. Express trust are created by the intention of the trustor or of the parties. in the amount of P26.000.00 (TSN. which is a general provision. plaintiff was an executive of Meryll Lynch. a trust has been established . 5. Private respondent explained how this trust was created: “ATTY. 39-41). the agent. Fennon S. it is an express trust which cannot be proved by parol evidence. which states: ‘Art. Civil Code. 5. An implied trust may be proved by oral evidence. Cruz paid the three vendors the balance due them (TSN. it results because of equity and arises by implication or operation of law.000. but from the facts and circumstances.’ Specific instances or examples of implied trusts are given in the Civil Code. Pierce. Sept. representing the following: ‘a) b) P15. by express provision of the Civil Code. parol evidence is allowed to prove its existence pursuant to Article 1457. the record is replete with clear and convincing evidence to show that (1) plaintiff Eduardo Tigno is the real buyer and true owner of the lands in question and (2) defendant Rodolfo M.. c) P5.understanding appears. to the three vendors for a total of P15. pp. 1990 Ed. pp. 101).
what happened next? A I talked to Atty. Q Did you comply? A Yes. sir.000. Q Was there any receipt signed evidencing receipt for that? A There was receipt for the P15. Q How much all in all? A P15. xxx xxx xxx Q Aside from instructing Atty. Manuel separately from the vendors.00 in cash. sir.00 Q Where is that receipt now? A I gave all the papers to him in my brown envelope. Rodolfo Tigno as vendee because I have plan to mortgage the property in PNB. Q Did you agree to the request of the vendors for the advance payment of P5. Q What was your instruction to Dominador Cruz? . and I told him to prepare the deed of sale at that time and I told him to place my older brother. Q Why did you go to the house of Atty. I trust [sic] him. secondly. did you also instruct Dominador Cruz for the payment of the balance? A Yes. Manuel? A For the executionof [sic] the deed of sale of the property I am going to buy.000.000. the other heirs failed to get the power of attorney from their sister in United States.000.000. what transpired? A The vendors requested for advance payment of P5. sir. Manuel to place the name of your brother.000. Q Was the deed of sale finished on that day? A No. Modesto Manuel. sir. sir. Q After giving the P15. sir.A They came to our family home at Guilig street and we went to the house of Atty. sir.00 advance payment which you said the deed of sale were not executed because of some requirement were not available. Q What was the reason? A The vendors did not bring the tax declarations. Q Do you remember in whose name the vendors allegedly to have received the P15. sir. Lingayen.00? A In my name. Q When the deed of sale were not executed on that day. Rodolfo Tigno.00 each for the three parcels of land? A Yes. received from Eduardo Tigno.00 each for the three parcels of land.
Respondent Court did not give credence to the financial capacity of  Petitioner Rodolfo Tigno: “Defendant Rodolfo’s denial of plaintiff’s evidence.00 lacks credibility. cannot be given credence and do not deserve belief. see me on the second week of July and I will give the whole payment of the property. Sept. Q And was the deed of sale covering the three parcels of land completed? A Yes.” The previously quoted testimonies of Modesto Manuel and Dominador Cruz substantially corroborate private respondent’s testimony. (Sec. although in possession of the deeds of sale in his name. failed to present a single witness to corroborate his claim that he bought the property partly with his own money and partly with the money he allegedly borrowed from a certain Jose Manaoat. 1989. if presented. and at one time or another was even supported financially by plaintiff. pp. Q When was that? A First week of July 1980. After going over the documents.000. Rule 131. Rules of Court). 11-12). which in fact was confirmed by Rodolfo during his cross-examination (TSN. I issued to him a check payable in the sum of P26. like an income tax return.000. Manaoat. Although the deeds of sale were in the name of Petitioner Rodolfo. was presented to show his income. and private respondent is the beneficiary. his financial capability is rendered doubtful by the fact that no evidence. His failure to present Manaoat gives rise to a presumption that the latter’s testimony. 18. was never presented. Petitioner Rodolfo. Q Did Dominador Cruz bring the documents to you in your office in Makati? A Yes.00. sir. 16. and his bare testimony that he was the real buyer. if given. 1988.A I told Dominador Cruz. Q Did you give the payment of the balance? A Yes.000.00 from Jose Manaoat to raise partly the amount of P53. . thus. His bare testimony that he borrowed P20. pp. 3[e]. after the completion of the papers. sir.00. Rodolfo was jobless then. I am leaving for United States. who was in the best position to testify that Rodolfo borrowed money from him. Oct. which would gives rise to the presumption that his testimony would be adverse to defendant. 67). 29. I will be back first week of July. as testified to by plaintiff (TSN. they cannot be deprived of the land they bought from Rodolfo Tigno. Oct. On the other hand. would have been  unfavorable to the former.” From the foregoing. It was unlikely that he had the financial means to pay for the lands in the total amount of P53. 1989. If indeed he was engaged in some piggery. other than his bare testimony. it is ineludible that Article 1448 of the Civil Code finds application in this case. As testified to by Arnulfo Peralta (TSN. the purchase price was paid by private respondent who was the real owner of the property. as he claimed.000. Second Issue: Are Petitioners Casipit Purchasers in Good Faith? Spouses Edualino and Evelyn Casipit contend that they “are purchasers in good faith” and for  valuable consideration. Petitioner Rodolfo is the trustee. without corroboration by other witnesses. 36-37). pp. sir. sir.
ownership of a portion thereof. Thereafter. Again. private respondent informed Petitioner Edualino Casipit that he was the owner of the property. of something over which he has no right to transfer. Tigno is not the owner of the lands in question. Article 1459 of the Civil Code provides: ‘Art. as he has no right to transfer. we had small picnic and that my father. what made you say that the defendant Edualino Casipit very well knew that you are the owner of the property he bought? A Way back in 1980 when I gave the advance payment to the vendors. sign that from that time you were the one who bought the parcels of land? A Yes. Petitioner Rodolfo. we cite public  respondent’s ruling. VIRAY: Q What if you invited them. On this point.” (Underscoring supplied) Since defendant-appellee is not the owner of the lands in question. which are not registered under the Torrens system. and Boy Casipit were there. Thus. unrebutted is the emphatic testimony of private respondent that Edualino was invited on May 2. or five (5) days before the consummation of the sale between Rodolfo and Spouses Casipit. ATTY. and could not have transferred ownership of said lands. . also uncontested is the testimony of Dominador Cruz that he met Edualino on April 24. a person cannot transfer ownership. the petition is hereby DENIED and the assailed Decision and Resolution are AFFIRMED in toto. Spouses Casipit did not acquire absolute ownership over the property since the apparent vendor.” Second. First.” WHEREFORE. Cruz told Edualino that he bought from private respondent a portion of the subject property for the purpose of building a dike. Third. private  respondent testified: “ATTY. by way of sale. because no valid sale in the first place was made between defendantappellees covering the portion of land in question. however. 1980 to a picnic in the fishpond. at the time of delivery. that whether or not defendant-appellee spouses are in good faith is entirely immaterial. to his co-defendant-appellee spouses. he could not by way of sale have transferred. which we find totally persuasive: “It is our well-considered opinion. 1459. During that meeting. but a mere trustee thereof. did not have the right to transfer ownership thereof. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered.This posturing is unacceptable. that defendant Rodolfo M. I invited my friends and right there in the fishpond. VIRAY: Q You said Edualino Casipit very well knew that the property is owned by you. 1989. At the picnic. SO ORDERED. Edualino asked Cruz to buy a portion of the  property from private respondent. The fact is. sir. premises considered. by way of sale. As a matter of basic principle in the law on sales. Be it remembered that the fishponds were not registered under the Torrens system. Costs against petitioners. as established by the evidence on record. and in any event.
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